U.S., EU strike trade deal that puts 15% tariffs on European goods
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Globe and Mail
14 minutes ago
- Globe and Mail
Japan presses U.S. to implement auto tariff cut, seeks clarification on other levies
Japan pressed the U.S. to swiftly implement an agreed cut to auto tariffs and sought clarification on levies for other goods, as conflicting interpretations of the bilateral trade deal further put pressure on Prime Minister Shigeru Ishiba's shaky administration. In a meeting with U.S. Secretary of Commerce Howard Lutnick in Washington on Wednesday, top trade negotiator Ryosei Akazawa urged the U.S. to implement at an early date an agreed cut to U.S. tariffs on Japanese auto and auto parts, Japan's government said. Akazawa also sought confirmation and 'immediate execution' of the two countries' agreement on U.S. levies for other goods imported from Japan, the government said in a statement released on Thursday. The meeting came hours before President Donald Trump's higher tariffs on dozens of trading partners kick in on Thursday, as Japan scrambles to clarify divergences with Washington on details of their bilateral trade deal. Under the deal clinched last month, the U.S. agreed to cut tariffs on Japanese car imports to 15 per cent from levies totalling 27.5 per cent previously, but did not announce a timeframe for the change to take effect. Trump's broad tariffs go into effect as economic pain in the U.S. surfaces While the two agreed that U.S. duties on most other Japanese goods will be cut to 15 per cent from 25 per cent effective Thursday, a lack of written confirmation of the deal has led to confusion over whether the new 15-per-cent tariffs will be stacked on top of existing levies. Japan argues the two countries had agreed its goods imported to the U.S. would be exempt from such 'stacking,' where they can be affected by multiple tariffs. Speaking in parliament on Tuesday, Akazawa said Japan wants to make sure goods such as Japanese beef, which already carries tariffs above 15 per cent, will not be charged the new 15-per-cent rate as an additional tariff. But a Federal Register attached to Trump's July 31 executive order that addressed tariff rates for many trading partners showed a 'no stacking' condition applies to the European Union, but no such clarification was issued for Japan. Japan's Asahi newspaper reported on Thursday, citing an unnamed White House official, that the U.S. will stack the tariffs, adding 15 per cent on all Japanese imports without applying exceptions for items that already have tariff rates above 15 per cent. In a regular news conference held after the Asahi report, Chief Cabinet Secretary Yoshimasa Hayashi said the U.S. was unlikely to stack 15-per-cent tariffs on existing levies. He said Akazawa confirmed the point with the U.S. side during his visit to Washington on Wednesday. Trump strikes tariff deal with Japan, auto stocks surge Given such discrepancies, Ishiba has been under attack in parliament and domestic media for not crafting a written joint statement stipulating details of the trade deal with the U.S. Ishiba defended the decision, telling parliament on Monday that Japan decided to forgo a written statement for fear that doing so could delay U.S. tariff reductions. Some lawmakers have warned a lack of written confirmation could backfire given Trump's unpredictable decision-making style. The confusion adds to trouble for Japan's shaky government led by Ishiba, who is facing calls to step down after the ruling coalition's huge loss in last month's upper house election. 'In negotiating with the U.S., Minister Akazawa at least ought to have nailed down exactly when U.S. automobile tariffs would be lowered to 15%,' ruling party heavyweight and former trade minister Ken Saito told Reuters on Tuesday. Yuichiro Tamaki, leader of opposition Democratic Party for the People, urged Akazawa to press Trump's administration harder to adhere to the bilateral agreement. 'After all, I do feel that a document on the agreement was necessary,' Tamaki wrote in an X post on Thursday.
Globe and Mail
14 minutes ago
- Globe and Mail
Trump's broad tariffs go into effect as economic pain in the U.S. surfaces
U.S. President Donald Trump was set to officially begin levying higher import taxes on dozens of countries Thursday, just as the economic fallout of his monthslong tariff threats has begun to create visible damage for the U.S. economy. The White House said that starting just after midnight that goods from more than 60 countries and the European Union would face tariff rates of 10 per cent or higher. Products from the European Union, Japan and South Korea will be taxed at 15 per cent, while imports from Taiwan, Vietnam and Bangladesh will be taxed at 20 per cent. For places such as the EU, Japan and South Korea, Trump also expects them to invest hundreds of billions of dollars in the U.S. 'I think the growth is going to be unprecedented,' Trump said Wednesday afternoon. He added that the U.S. was 'taking in hundreds of billions of dollars in tariffs,' but he couldn't provide a specific figure for revenues because 'we don't even know what the final number is' regarding tariff rates. Explainer: Here are the trade deals the U.S. has announced so far Despite the uncertainty, the Trump White House is confident that the onset of his broad tariffs will provide clarity about the path of the world's largest economy. Now that companies understand the direction the U.S. is headed, the administration believes they can ramp up new investments and jump-start hiring in ways that can rebalance the U.S. economy as a manufacturing power. But so far, there are signs of self-inflicted wounds to America as companies and consumers alike brace for the impact of new taxes. What the data has shown is a U.S. economy that changed in April with Trump's initial rollout of tariffs, an event that led to market drama, a negotiating period and Trump's ultimate decision to start his universal tariffs on Thursday. After April, economic reports show that hiring began to stall, inflationary pressures crept upward and home values in key markets started to decline, said John Silvia, CEO of Dynamic Economic Strategy. 'A less productive economy requires fewer workers,' Silvia said in an analysis note. 'But there is more, the higher tariff prices lower workers' real wages. The economy has become less productive, and firms cannot pay the same real wages as before. Actions have consequences.' Even then, the ultimate transformations of the tariffs are unknown and could play out over months, if not years. Many economists say the risk is that the American economy is steadily eroded rather than collapsing instantly. 'We all want it to be made for television where it's this explosion – it's not like that,' said Brad Jensen, a professor at Georgetown University. 'It's going to be fine sand in the gears and slow things down.' Trump has promoted the tariffs as a way to reduce the persistent trade deficit. But importers sought to avoid the taxes by importing more goods before the taxes went into effect. As a result, the $582.7 billion trade imbalance for the first half of the year was 38% higher than in 2024. Total construction spending has dropped 2.9% over the past year, and the factory jobs promised by Trump have so far resulted in job losses. The lead-up to Thursday fit the slapdash nature of Trump's tariffs, which have been variously rolled out, walked back, delayed, increased, imposed by letter and frantically renegotiated. Tony Keller: What does Donald Trump want from Canada? We are about to find out The process has been so muddled that officials for key trade partners were unclear at the start of the week whether the tariffs would begin Thursday or Friday. The language of the July 31 order to delay the start of tariffs from Aug. 1 said the higher tax rates would start in seven days. On Wednesday morning, Kevin Hassett, director of the White House National Economic Council, was asked if the new tariffs began at midnight Thursday, and he said reporters should check with the U.S. Trade Representative's Office. Trump on Wednesday announced additional 25-per-cent tariffs to be imposed on India for its buying of Russian oil, bringing their total import taxes to 50 per cent. He has said that import taxes are still coming on pharmaceutical drugs and announced 100-per-cent tariffs on computer chips, meaning the U.S. economy could remain in a place of suspended animation as it awaits the impact. The President's use of a 1977 law to declare an economic emergency to impose the tariffs is also under challenge. The impending ruling from last week's hearing before a U.S. appeals court could cause Trump to find other legal justifications if judges say he exceeded his authority. Even people who worked with Trump during his first term are skeptical that things will go smoothly for the economy, such as Paul Ryan, the former Republican House speaker, who has emerged as a Trump critic. 'There's no sort of rationale for this other than the President wanting to raise tariffs based upon his whims, his opinions,' Ryan told CNBC on Wednesday. 'I think choppy waters are ahead because I think they're going to have some legal challenges.' Still, the stock market has been solid during the recent tariff drama, with the S&P 500 index climbing more than 25 per cent from its April low. The market's rebound and the income tax cuts in Trump's tax and spending measures signed into law on July 4 have given the White House confidence that economic growth is bound to accelerate in the coming months. As of now, Trump still foresees an economic boom while the rest of the world and American voters wait nervously. 'There's one person who can afford to be cavalier about the uncertainty that he's creating, and that's Donald Trump,' said Rachel West, a senior fellow at The Century Foundation who worked in the Biden White House on labour policy. 'The rest of Americans are already paying the price for that uncertainty.'
Winnipeg Free Press
44 minutes ago
- Winnipeg Free Press
Trump's broad tariffs go into effect, just as economic pain is surfacing
WASHINGTON (AP) — President Donald Trump was set to officially begin levying higher import taxes on dozens of countries Thursday, just as the economic fallout of his monthslong tariff threats has begun to create visible damage for the U.S. economy. The White House said that starting just after midnight that goods from more than 60 countries and the European Union would face tariff rates of 10% or higher. Products from the European Union, Japan and South Korea will be taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh will be taxed at 20%. For places such as the EU, Japan and South Korea, Trump also expects them to invest hundreds of billions of dollars in the U.S. 'I think the growth is going to be unprecedented,' Trump said Wednesday afternoon. He added that the U.S. was 'taking in hundreds of billions of dollars in tariffs,' but he couldn't provide a specific figure for revenues because 'we don't even know what the final number is' regarding tariff rates. Despite the uncertainty, the Trump White House is confident that the onset of his broad tariffs will provide clarity about the path of the world's largest economy. Now that companies understand the direction the U.S. is headed, the administration believes they can ramp up new investments and jump-start hiring in ways that can rebalance the U.S. economy as a manufacturing power. But so far, there are signs of self-inflicted wounds to America as companies and consumers alike brace for the impact of new taxes. What the data has shown is a U.S. economy that changed in April with Trump's initial rollout of tariffs, an event that led to market drama, a negotiating period and Trump's ultimate decision to start his universal tariffs on Thursday. After April, economic reports show that hiring began to stall, inflationary pressures crept upward and home values in key markets started to decline, said John Silvia, CEO of Dynamic Economic Strategy. 'A less productive economy requires fewer workers,' Silvia said in an analysis note. 'But there is more, the higher tariff prices lower workers' real wages. The economy has become less productive, and firms cannot pay the same real wages as before. Actions have consequences.' Even then, the ultimate transformations of the tariffs are unknown and could play out over months, if not years. Many economists say the risk is that the American economy is steadily eroded rather than collapsing instantly. 'We all want it to be made for television where it's this explosion — it's not like that,' said Brad Jensen, a professor at Georgetown University. 'It's going to be fine sand in the gears and slow things down.' Trump has promoted the tariffs as a way to reduce the persistent trade deficit. But importers sought to avoid the taxes by importing more goods before the taxes went into effect. As a result, the $582.7 billion trade imbalance for the first half of the year was 38% higher than in 2024. Total construction spending has dropped 2.9% over the past year, and the factory jobs promised by Trump have so far resulted in job losses. The lead-up to Thursday fit the slapdash nature of Trump's tariffs, which have been variously rolled out, walked back, delayed, increased, imposed by letter and frantically renegotiated. The process has been so muddled that officials for key trade partners were unclear at the start of the week whether the tariffs would begin Thursday or Friday. The language of the July 31 order to delay the start of tariffs from Aug. 1 said the higher tax rates would start in seven days. On Wednesday morning, Kevin Hassett, director of the White House National Economic Council, was asked if the new tariffs began at midnight Thursday, and he said reporters should check with the U.S. Trade Representative's Office. Trump on Wednesday announced additional 25% tariffs to be imposed on India for its buying of Russian oil, bringing their total import taxes to 50%. He has said that import taxes are still coming on pharmaceutical drugs and announced 100% tariffs on computer chips, meaning the U.S. economy could remain in a place of suspended animation as it awaits the impact. The president's use of a 1977 law to declare an economic emergency to impose the tariffs is also under challenge. The impending ruling from last week's hearing before a U.S. appeals court could cause Trump to find other legal justifications if judges say he exceeded his authority. Monday Mornings The latest local business news and a lookahead to the coming week. Even people who worked with Trump during his first term are skeptical that things will go smoothly for the economy, such as Paul Ryan, the former Republican House speaker, who has emerged as a Trump critic. 'There's no sort of rationale for this other than the president wanting to raise tariffs based upon his whims, his opinions,' Ryan told CNBC on Wednesday. 'I think choppy waters are ahead because I think they're going to have some legal challenges.' Still, the stock market has been solid during the recent tariff drama, with the S&P 500 index climbing more than 25% from its April low. The market's rebound and the income tax cuts in Trump's tax and spending measures signed into law on July 4 have given the White House confidence that economic growth is bound to accelerate in the coming months. As of now, Trump still foresees an economic boom while the rest of the world and American voters wait nervously. 'There's one person who can afford to be cavalier about the uncertainty that he's creating, and that's Donald Trump,' said Rachel West, a senior fellow at The Century Foundation who worked in the Biden White House on labor policy. 'The rest of Americans are already paying the price for that uncertainty.'
