No one spared: Allies reel as Trump rewrites tariff rules, sparks market jitters
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 trade policy is a demonstration of economic power that he hopes will revive domestic manufacturing, but many economists fear it could fuel inflation and lower growth.
In his latest move, the president raised import duties from 10 per cent to levels between 15 per cent and 41 per cent for various 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.
But questions remain surrounding the implementation of these agreements.
Others like India face a 25-per cent duty – to be doubled in three weeks – while Syria, Myanmar and Laos face levels of 40 or 41 per cent.
Switzerland's government, which failed to convince Trump not to impose a 39-per cent tariff, said after an extraordinary meeting Thursday that it remains committed to talks aimed at lowering levies.
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, while global markets largely shrugged off the higher tariffs Thursday.
'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 Wednesday that he plans an 'approximately 100-per cent tariff' on semiconductor imports, but with no charge for companies investing in his country or committed to doing so.
Companies and industry groups warn 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 October 5 – will not face the new rates.
With the dust settling, at least temporarily, Georgetown University professor Marc Busch expects US businesses to 'pass along more of the tariff 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 from an existing 25 per cent on US auto imports.
Both 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.
Japan's tariffs envoy Ryosei Akazawa told reporters Thursday that Washington is expected to revise its order such that the new toll does not stack uniformly on existing ones. It would also lower vehicle tariffs on Japanese autos.
Washington and Beijing meanwhile have a temporary truce in their tariff standoff expiring August 12. Commerce Secretary Howard Lutnick told Fox Business it is likely this will be extended 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 Wednesday with broad exemptions.
Lutnick expects Trump's duties could bring in US$50 billion in monthly revenue. — AFP
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