Introduction to Trump’s Tariff Policy
In his election campaign, Donald Trump once said that "tariff is the most beautiful word in the dictionary". Now, after six months in office, the US President endeavors to implement his specific vision of global trade into reality. With a step that shocked both politics and business around the world, Trump announced on April 2 that he would impose a "basic tariff" of 10% on imported goods to the United States.
Tariff Impositions
In addition, goods from around 60 other trading partners would be exposed to so-called mutual tariffs, which were even higher and, as a repayment for the unfair trade policy, meant what Trump described as "worst offender". On July 31, however, Trump again signed an executive regulation that again imposed new and even higher tariffs for the number of countries. He reported that he reduces the country’s trade deficits with many of his trading partners. The executive order determines the prices for almost 70 countries that are between 10% and 41% for goods that are exceeded by other jurisdiction to avoid the US obligations.
Trade Agreements
The United States and the European Union agreed that European goods that were imported to the USA would be exposed to a basic tariff of 15%. This includes the key automotive sector of the EU, which has been exposed to a tax of 25% since Trump took office in early January. In contrast, the EU US companies will not calculate any tasks at all and are committed to buying US $ 750 billion dollars and, according to the White House in the United States, in the United States. The agreement, which must still be signed by all 27 EU members, has already been heavily criticized.
Deals with Other Countries
The United Kingdom was the first country to vote for a trade agreement with Washington in May. British products are subject to a basic rate of 10% with exceptions for some industries. The United Kingdom is still negotiating exceptions for its steel and aluminum products from the violence of 25%. In return, Great Britain had to open its market for US ethanol and beef. Japan’s exports to the United States are taxed with 15%, including automobiles, an industry that constitutes 30% of Japanese exports to the United States in 2024.
Trump’s Deals with South Korea and Other Countries
With regard to South Korea, the recent negotiations at a basic tariff of 15% have led to all imports from this country-from one of the top 10 USA and an important Asian ally of 25% of 25%. Trump said on Wednesday that South Korea also agreed to invest 350 billion US dollars in US projects and to buy $ 100 billion in liquid gas and other energy products. In addition, South Korea will accept American products, including automobiles and agricultural goods in its markets and no import duties, he added. Washington has also completed trade agreements with the Philippines, Vietnam, Indonesia, and Pakistan.
China’s Response
China-the second largest economy of world-is a special case. Washington and Beijing had raised the other of the other to more than 100% before the interest was temporarily reduced over a period of 90 days. This break will end on August 12th. China has taken an aggressive stance in response to Trump’s brief threat to impose an introduction of 145% for imports, to convey their own tariffs for US goods and to block the sale of important rare earth minerals and components used by American defense and high-tech manufacturers.
Countries Without Bilateral Trade Agreements
Countries without bilateral trade agreements will soon be exposed to mutual tariffs from 25% to 50%, whereby a baseline of 15% to 20% is not completed for any deal. Among the tariff levels that are adapted to Trump’s latest order, Switzerland now has a higher obligation of 39%. The Swiss government said on Friday that it would negotiate the higher tax that may hammer its most important pharmaceutical industry. The new sentence increases compared to the previously threatened 31%.
Brazil and India’s Situation
Brazil is one of the few important economies that carry out a trade deficit with the United States, which means that Brazil imports more from the USA than in the country. Nevertheless, the US President threatens to impose a 50% tariff on the products of Brazil due to political differences. India has drawn Trump’s anger for his huge surplus with the USA and his trade relationships with Russia. As a result, Trump announced on Wednesday that he would carry out a tariff of 25% and an additional "punishment" through the purchase of Russian oil by India, which helps Moscow to finance his war in Ukraine.
Canada and Mexico’s Situation
Canada and Mexico-two of the largest trading partners of the USA-are not spared Trump’s threats of tariffs, although the trade between the three neighbors is subject to the trade agreement of the US Mexico Canada (USMCA), which was negotiated during Trump’s first term in Trump. At the beginning of this month, Trump threatened to increase the current tariffs in Mexico from 25% to 30% from August 1st, and said that President Claudia Sheinbaum’s government hadn’t done enough to secure its common border. On Thursday, the US President extended the current prices of Mexico for 90 days to give more time for trade negotiations. On Thursday, the US President Canada honored a separate tariff gain, in which taxes for goods from the country were increased from 25% to 35% from August 1st.
