Washington (AFP) – The United States began charging higher tariffs on goods from dozens of trading partners Thursday, in a major escalation of President Donald Trump’s drive to reshape global commerce in America’s favor. Shortly before the new levies kicked in, Washington separately announced it would double Indian tariffs to 50 percent and hit many semiconductor imports from around the world with a 100-percent levy.
As an executive order signed last week by Trump took effect, US import duties rose from 10 percent to levels between 15 percent and 41 percent for a list of trading partners. Many imports from economies including the European Union, Japan, and South Korea now face a 15-percent tariff, even with deals struck with Washington to avert steeper threatened levies. But others like India face a 25-percent duty—which is set to be doubled in three weeks to 50 percent—while Syria, Myanmar, and Laos face staggering levels at either 40 percent or 41 percent.
Switzerland’s government, which failed to convince Trump not to impose a stinging 39-percent tariff, was set to hold an extraordinary meeting later Thursday. Taking to his Truth Social platform just after midnight, Trump posted: “IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!” The latest wave of “reciprocal” duties, aimed at addressing trade practices Washington deems unfair, broadens the measures Trump has imposed since returning to the presidency.
On the eve of his latest salvo, he doubled planned duties on Indian goods to 50 percent, citing New Delhi’s continued purchase of Russian oil. The new levy—up from 25 percent now—would take effect in three weeks. The Federation of Indian Export Organisations called the move a “severe setback for Indian exports, with nearly 55 percent of our shipments to the US market directly affected.” For New Delhi, one of the main sticking points has been Washington’s demand to access India’s vast agricultural and dairy market. “We will not compromise with the interests of our farmers, our dairy sector, our fishermen,” Prime Minister Narendra Modi said Thursday.
Trump’s order also threatened penalties on other countries that “directly or indirectly” import Russian oil, a key revenue source for Moscow’s war in Ukraine. Washington has already separately imposed tariffs on sector-specific imports such as steel, autos, and pharmaceuticals. Trump said Wednesday he also planned an “approximately 100 percent tariff” on semiconductor imports, but with “no charge” for companies investing in the United States or committed to doing so. Shares in Taiwanese chip-making giant TSMC surged as Taipei said it would be exempt, but some other Asian manufacturers took a beating.
Companies and industry groups warn the new levies will severely hurt smaller American businesses, while economists caution that they could fuel inflation and hit growth. With the dust settling on countries’ tariff levels, at least for now, Georgetown University professor Marc Busch expects US businesses to pass along more of the bill to consumers. An earlier 90-day pause in these higher “reciprocal” tariffs gave importers time to stock up, he said. But although the wait-and-see strategy led businesses to absorb more of the tariff burden initially, inventories are depleting, and it is unlikely they will do this indefinitely, he told AFP.
“With back-to-school shopping just weeks away, this will matter politically,” said Busch, an international trade policy expert. The tariffs leave lingering questions for partners that have negotiated deals with Trump recently. Tokyo and Washington, for example, appear at odds over key details of their pact, in particular regarding when lower levies on Japanese cars will take place. Generally, US auto imports now face a 25-percent duty under a sector-specific order. Toyota has cut its full-year profit forecast by 14 percent because of the tariffs.
Japan and the United States also appear to differ on whether the “reciprocal” tolls of 15 percent on other Japanese goods would be on top of existing levies or—like the EU—be capped at that level. China and the United States, meanwhile, currently have a shaky truce in their standoff, but that is due to expire on August 12. Chinese exports to the United States tumbled 21.7 percent last month, official data showed, while those to the European Union jumped 9.2 percent and to Southeast Asia by 16.6 percent.
The EU is seeking a carveout from tariffs for its key wine industry. In a recent industry letter addressed to Trump, the US Wine Trade Alliance and others urged the sector’s exclusion from tolls, saying: “Wine sales account for up to 60 percent of gross margins of full-service restaurants.” Trump has separately targeted Brazil over the trial of his right-wing ally, former president Jair Bolsonaro, who is accused of planning a coup. US tariffs on various Brazilian goods surged from 10 percent to 50 percent Wednesday, but broad exemptions including for orange juice and civil aircraft are seen as softening the blow. Still, key products like Brazilian coffee, beef, and sugar are hit.
© 2024 AFP
