US partners seek relief as Trump tariffs upend global trade
US PRESIDENT Donald Trump’s steeper global tariffs came into effect on Thursday, leaving dozens of US partners scrambling to secure relief from soaring levies that are rewriting global trade practice.
Shortly before the new rates kicked in, Washington also announced it would double India tariffs to 50 per cent and hit many semiconductor imports with a 100-per cent duty.
Trump’s tariff policy is a demonstration of economic power that he hopes will revive domestic manufacturing by keeping out imports, but many economists fear it will trigger inflation and lower growth.
In his latest move, the president raised import duties from 10 per cent to levels between 15 percent and 41 per cent for a list of trading partners.
Many products from the European Union, Japan and South Korea now face a 15-per cent tariff, even with deals struck with Washington to avert steeper threatened levies.
Others like India face a 25-per cent duty - to be doubled in three weeks - while Syria, Myanmar and Laos face staggering levels of 40 per cent.
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Switzerland’s government, which failed to convince Trump not to impose a stinging 39-per cent tariff, said after an extraordinary meeting on Thursday that it remains committed to talks aimed at lowering tariffs.
Trump’s latest wave of “reciprocal” duties - a response to trade practices Washington deems unfair - broadens measures imposed since he returned to the presidency.
Wall Street’s major indexes mostly dipped on Thursday, while other global markets largely shrugged off the higher tariffs for now.
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‘No charge’
The steeper duties maintain exemptions on sectors that Trump separately targeted, like steel and autos.
Categories that could be hit later, like pharmaceuticals and semiconductors, are also spared for now.
Trump said on Wednesday that he plans an “approximately 100 per cent tariff” on semiconductor imports, but with no charge for companies investing in the United States or committed to doing so.
Companies and industry groups warn that Trump’s new levies will severely hurt smaller American businesses.
But providing some reprieve from the “reciprocal” tariff hike is a clause saying that goods already en route to the United States before Thursday - and arriving before Oct 5 - will not face the new rates.
With the dust settling, at least for now, Georgetown University professor Marc Busch expects US businesses to pass along more of the bill to consumers.
Inventories are depleting and it is unlikely firms will absorb costs indefinitely, he told AFP.
Trump is using tariffs to pursue a variety of goals - such as doubling planned duties on India due to its purchase of Russian oil, a key revenue source in Moscow’s war in Ukraine.
The order threatened penalties on countries that “directly or indirectly” import Russian oil too.
The Federation of Indian Export Organisations called the move a “severe setback” impacting nearly 55 per cent of shipments to the United States.
Discrepancies
Lingering questions remain for partners who have negotiated deals with Trump.
Tokyo and Washington appear at odds over the terms of their pact, such as when levies on Japanese cars will be lowered to 15 per cent.
Generally, US auto imports face a 25-per cent duty under a sector-specific order, weighing on Japanese automakers.
The two countries also seem to differ on whether the new 15-per cent toll on Japanese goods would be added to existing levies or - like the EU - be capped at that level for many products.
Washington and Beijing meanwhile have a temporary truce in their tariff standoff expiring Aug 12.
Commerce Secretary Howard Lutnick told Fox Business it is likely that Trump will extend the pause on higher China tariffs by another 90 days.
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 to 50 per cent on Wednesday, but with broad exemptions.
Lutnick expects Trump’s duties could bring in US$50 billion in monthly revenue. AFP
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