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Associated Press
a few seconds ago
- Associated Press
New US tariffs cloud outlook for exporters in Asia and beyond
BANGKOK (AP) — President Donald Trump's new tariff rates on U.S. imports from dozens of countries took effect Thursday, the latest chapter in the saga of Trump's reshaping of global trade. But many questions remain. Trump has threatened tariffs of up to 200% on imports of pharmaceuticals and has ordered a 100% import tax on computer chips. Most U.S. imports of copper, steel and aluminum are subject to a 50% tariff. There's still no agreement on what tariffs might apply to products shipped from China. India has no deal yet and faces a potential 50% tariff as Trump pressures it to stop buying oil from Russia. Recent data shows uncertainty is clouding the outlook for exporters around the world as a rush to beat the tariffs during a pause for negotiation tapers off. Companies are reporting billions of dollars in higher costs or losses due to the higher import duties. Global financial markets took Thursday's tariff adjustments in stride, with Asian shares and U.S. futures mostly higher. Here's where things stand in what has proven to be a fast-changing policy landscape. The tariffs taking effect this week The tariffs announced on Aug. 1 apply to 66 countries, Taiwan and the Falkland Islands. They are a revised version of what Trump called " reciprocal tariffs,' announced on April 2: import taxes of up to 50% on goods from countries that have a trade surplus with the United States, along with 10% 'baseline'' taxes on almost everyone else. That move triggered sell-offs in financial markets and Trump backtracked to allow time for trade talks. The president has bypassed Congress, which has authority over taxes, by invoking a 1977 law to declare the trade deficit a national emergency. That's being challenged in court, but the revised tariffs still took effect. To keep their access to the huge American market, major trading partners have struck deals with Trump. The United Kingdom agreed to 10% tariffs and the European Union, South Korea and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year, but down from the 30% Trump had ordered for the EU and the 25% he ordered for Japan. Countries in Africa and Asia are mostly facing lower rates than the ones Trump decreed in April. Thailand, Pakistan, South Korea, Vietnam, Indonesia and the Philippines cut deals with Trump, settling for rates of around 20%. Indonesia views its 19% tariff deal as a leg up against exporters in other countries that will have to pay slightly more, said Fithra Faisal Hastiadi, a spokesperson in the Indonesian president's office. 'We were competing against Vietnam, India, Bangladesh, Sri Lanka and China ... and they are all subject to higher reciprocal tariffs,' Hastiadi said. 'We believe we will stay competitive.' The latest situation for China and India Trump has yet to announce whether he will extend an Aug. 12 deadline for reaching a trade agreement with China that would forestall earlier threats of tariffs of up to 245%. Treasury Secretary Scott Bessent said the president is deciding about another 90-day delay to allow time to work out details of an agreement setting tariffs on most products at 50%, including extra import duties related to illicit trade in fentanyl. Higher import taxes on small parcels from China have hurt smaller factories and layoffs have accelerated, leaving some 200 million workers reliant on 'flexible work' — the gig economy — for their livelihoods, the government estimates. India also has no broad trade agreement with Trump. On Wednesday, Trump he signed an executive order placing an extra 25% tariff for its purchases of Russian oil, bringing combined U.S. tariffs to 50%. India's Foreign Ministry has stood firm, saying it began importing oil from Russia because traditional supplies were diverted to Europe after the outbreak of the Ukraine conflict, a 'necessity compelled by the global market situation.' The hardest-hit countries Struggling, impoverished Laos and war-torn Myanmar and Syria face 40-41% rates. Trump whacked Brazil with a 50% import tax largely because he's unhappy with its treatment of former Brazilian President Jair Bolsonaro. South Africa said the steep 30% rate Trump has ordered on the exporter of precious gems and metals has put 30,000 jobs at risk and left the country scrambling to find new markets outside the United States. Even wealthy Switzerland is under the gun. Swiss officials were visiting Washington this week to try to stave off a whopping 39% tariff on U.S. imports of its chocolate, watches and other products. The rate is over 2 1/2 times the 15% rate on European Union goods exported to the United States. Canada and Mexico have their own arrangements Goods that comply with the 2020 United States-Mexico-Canada Agreement that Trump negotiated during his first term are excluded from the tariffs. Even though U.S. neighbor and ally Canada was hit by a 35% tariff after it defied Trump, a staunch supporter of Israeli Prime Minister Benjamin Netanyahu, by saying it would recognize a Palestinian state, nearly all of its exports to the U.S. remain duty free. Canada's central bank says 100% of energy exports and 95% of other exports are compliant with the agreement since regional rules mean Canadian and Mexico companies can claim preferential treatment. The slice of Mexican exports not covered by the USMCA is subject to a 25% tariff, down from an earlier rate of 30%, during a 90-day negotiating period that began last week. The outlook for businesses Surveys of factory managers offer monthly insights into export orders, hiring and other indicators of how businesses are faring. The latest figures in the United States and globally mostly showed conditions deteriorating. In Japan, factory output contracted in July, purchasing activity fell and hiring slowed, according to the S&P Global Manufacturing PMI. But the data were collected before Trump announced a trade deal that cut tariffs on Japanese exports to 15% from 25%. Similar surveys show a deterioration in manufacturing conditions worldwide, as a boost from 'front loading' export orders to beat higher tariffs faded, S&P Global said. Similar measures for service industries have remained stronger, reflecting more domestic business activity. In Asia, that includes a rebound in tourism across the region. Corporate bottom lines are also taking a hit. Honda Motor said Wednesday that it estimates the cost from higher tariffs at about $3 billion. On top that, the U.S. economy — Trump's trump card as the world's biggest market — is starting to show pain from months of tariff threats. ___ Associated Press writer Niniek Karmini in Jakarta and Aniruddha Ghosal in Hanoi contributed.
Associated Press
a few seconds ago
- Associated Press
How India ended up facing steep US tariffs despite its strategic partnership
NEW DELHI (AP) — U.S. President Donald Trump has vowed additional 25% tariff on India for its purchases of Russian oil, bringing the combined tariffs imposed by the United States on its ally to 50%. India has called the additional tariffs 'unfortunate.' Trump's Wednesday announcement came as India and the U.S. are still negotiating a trade deal that has faced roadblocks after it was first announced when Indian Prime Minister Narendra Modi met Trump in Washington earlier this year. It also comes at a time when ties between India and the U.S. appear to have taken a hit even as Modi and Trump share a warm relationship. Here is how India, a strategic partner of the U.S. in Asia, ended up facing steep tariffs: February Trump imposes tariffs on Canada, Mexico and China. He initially spares India, despite repeatedly calling the country a 'tariff king,' but threatens that high tariffs are coming. February 14 Modi meets Trump in Washington in an effort to resolve trade concerns. Trump again warns of higher U.S. tariffs on Indian goods. India and the U.S. agree to work on a trade deal and expand bilateral trade to $500 billion by 2030. They don't share details as to how the target would be achieved. Modi says he expects a deal to be completed later this year. March 3 India's trade minister, Piyush Goyal, visits Washington and meets his counterparts to initiate negotiations for the bilateral trade agreement. April 21 U.S. Vice President JD Vance meets Modi in New Delhi and says both sides are making progress on trade talks. India and the U.S. also finalize the terms of reference for the trade negotiation, bringing them a step closer to an agreement. May 10 Trump says he stopped military hostilities between India and Pakistan by offering possible trade concessions to both. India is angered by Trump's claims and disputes them. May 17 Trade minister Goyal leads a team of senior Indian officials to Washington for more negotiations. India's commerce secretary says the proposed bilateral trade agreement is progressing 'very well.' June 27 Trump signals a deal may be close. 'We're having some great deals. We have one coming up, maybe with India, a very big one, where we're going to open up India,' he says. July An Indian trade delegation visits Washington for another round of discussions, which end without reaching a breakthrough. July Goyal says India is ready to make trade deals in 'the national interest,' but not just to meet deadlines. July 31 Trump imposes 25% tariffs on Indian imports. He warns of further penalties for India because of its buying of Russian oil, and calls its economy 'dead.' August 6 Trump vows an additional 25% import taxes on India to punish the country for its purchases of Russian oil, bringing combined tariffs to 50%. The tariffs are set to go into effect after 21 days.
Bloomberg
a few seconds ago
- Bloomberg
Trump Sees a Good Chance He'll Meet Putin, Zelenskiy
Good morning. Donald Trump sees a good chance he'll meet Vladimir Putin and Volodymyr Zelenskiy. The Bank of England is set to lower interest rates today. And Egypt's billion-dollar antiquities museum opens in November. Listen to the day's top stories. Donald Trump said there was a 'very good chance' he would meet with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy soon in another bid to broker peace between the two countries. Russia had earlier said Putin exchanged 'signals' with the US when talking to Trump's envoy Steve Witkoff. Trump's new tariffs officially took hold. The president also announced plans to impose a 100% tariff on semiconductor imports, though he would exempt companies moving production to the US. With Trump by his side, Apple's Tim Cook unveiled a fresh $100 billion investment plan. Here's how Apple is expanding an 18-year-old iPhone glass deal to avoid levies.
