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News.com.au
2 hours ago
- News.com.au
Trump signals tariffs on pharma, chips as trade war widens
US President Donald Trump signaled Tuesday that fresh tariffs on imported pharmaceuticals and semiconductors could be unveiled as soon as the coming week, as he presses on in efforts to reshape global trade. Trump's latest comments, in an interview on CNBC, come days before a separate set of tariff hikes takes effect on dozens of economies later this week. The sweeping tariff plans have sparked a flurry of activity as governments seek to avert the worst of his threats -- with Switzerland's leaders heading to Washington on Tuesday in a last-minute push to avoid punitive duties. But he appears set to widen his trade wars further. The US president told CNBC that upcoming tariffs on imported pharmaceuticals could reach 250 percent, while adding that he plans for new duties on foreign semiconductors soon. "We'll be putting (an) initially small tariff on pharmaceuticals, but in one year, one-and-a-half years, maximum, it's going to go to 150 percent," Trump said. "And then it's going to go to 250 percent because we want pharmaceuticals made in our country." Trump also said that Washington will be announcing tariffs "within the next week or so." He added: "We're going to be announcing on semiconductors and chips." - Concern for US economy - Trump has taken aim at products from different countries with varying tariff rates after imposing a 10-percent levy on almost all trading partners in April -- with excluded products targeted by sector. While Swiss leaders are seeking to stave off a US tariff hike to 39 percent come Thursday -- which excludes sectors like pharma -- Trump's plans for a steep pharma levy will likely be a point of contention in any talks. Pharmaceuticals represented 60 percent of Swiss goods exports to the United States last year. Besides probing pharmaceuticals and chips imports, Trump has already imposed steep duties of 50 percent on imports of steel and aluminum, alongside lower levels on autos and parts. In the same CNBC interview, Trump said he expects to raise the US tariff on Indian imports "very substantially over the next 24 hours" due to the country's purchases of Russian oil. This is a key revenue source for Moscow's military offensive on Ukraine. His pressure on India comes after signaling fresh sanctions on Moscow if it did not make progress by Friday towards a peace deal with Kyiv, more than three years since Russia's invasion. Moscow is anticipating talks this week with the US leader's special envoy Steve Witkoff, and the Kremlin has criticized Trump's threat of raising tariffs on Indian goods. Weak employment data last week pointed to challenges for the US economy as companies take a cautious approach in hiring and investment while grappling with Trump's radical -- and rapidly changing -- tariffs policy. The tariffs are a demonstration of raw economic power that Trump sees as putting US exporters in a stronger position while encouraging domestic manufacturing by keeping out foreign imports. But the approach has raised fears of inflation and other economic fallout in the world's biggest economy.
The Australian
4 hours ago
- The Australian
India defies Donald Trump on Russian oil despite tariff threats
India is digging in its heels and resisting pressure from the US to curb purchases of Russian oil, despite threats by President Trump to retaliate by imposing higher tariffs on India. Last week, Trump said he would place a 25 per cent tariff on Indian imports to the US in retaliation for India's large-scale purchases of cheap Russian oil. Then, on Monday, the president said he would be 'substantially raising' tariffs on Indian goods — on top of the 25 per cent duty — because of the 'massive amounts' of Russian oil that India buys. India has nonetheless refused to back down and has suggested that it intends to continue to buy Russian oil. Political experts said that Indian Prime Minister Narendra Modi is calculating that Trump will decide that ties between the two countries are ultimately too critical to jeopardise in a trade spat. Many Indian experts believe that Trump is spotlighting the issue to gain short-term leverage in ongoing trade negotiations with New Delhi — and that he will drop it once a deal is signed. In recent years, the US has grudgingly accepted India's close ties with Russia, despite occasional protests, because New Delhi is considered a crucial partner in countering China's growing power. 'The view is that this is not going to affect the overall relationship, and that we don't have to kowtow,' said Sreeram Chaulia, dean at O.P. Jindal Global University's School of International Affairs in Sonipat, India. India has taken advantage of discounted oil prices from Russia following Moscow's invasion of Ukraine. By late 2024, India accounted for over one-third of Russia's oil exports, second only to China at nearly 50 per cent, according to the Observer Research Foundation, an Indian think tank. Before the war, India bought most of its oil from Gulf countries. New Delhi has repeatedly defended its purchases of Russian oil as necessary to support its economy and keep energy prices steady for its huge population. In a Monday statement, India's Foreign Ministry said that its imports of Russian oil ramped up only after its traditional supplies were diverted to European countries during the Ukraine war. The ministry also accused the US and the EU of operating a double standard — continuing to trade with Russia while penalising others for doing the same. 'The targeting of India is unjustified and unreasonable,' it added. When facing pressure from bigger powers, India has also historically defended its autonomy in foreign policy, Chaulia said. That independent streak surprised many when New Delhi remained neutral on Russia's invasion of Ukraine despite a volley of criticism. Over the weekend, Modi vigorously defended India's right to prioritise its own economic wellbeing at a time of global uncertainty. 'Today, the world economy is going through many apprehensions, there is an atmosphere of instability,' Modi said in a speech during a Saturday rally in the northern Indian state of Uttar Pradesh. 'In such a situation, the countries of the world are focusing on their respective interests.' He urged Indians to boost the economy by buying and selling only homegrown products 'made by the sweat of an Indian.' The White House has rapidly ratcheted up pressure on India as Trump looks for ways to push President Vladimir Putin toward ending the Ukraine war. Trump has vowed to impose tariffs on countries that do business with Moscow, and threatened India with a 'penalty' for continuing to buy Russian goods. Stephen Miller, deputy chief of staff at the White House and a top aide to Trump, accused India on Sunday of taking advantage of the US on trade and financing the war by buying Russian oil. He also took aim at India's protectionist policies. 'India portrays itself as being one of our closest friends in the world, but they don't accept our products. They impose massive tariffs on us,' Miller said on Fox News. A sticking point in negotiations is the US's push to open India's agricultural and dairy markets to foreign products, a politically sensitive issue for Modi. But India could pacify Trump in other ways, experts said, such as agreeing to big investments in the US that will allow him to claim a win. Wall Street Journal The Wall Street Journal Congress could limit the mutually assured political destruction as partisans move to redistrict more than once a decade. The Wall Street Journal The White House is preparing to step up pressure against big banks over perceived discrimination against conservatives and crypto companies.
News.com.au
5 hours ago
- News.com.au
Productivity Commission urges against over-regulating AI, flags $116bn growth potential
The government has been warned against implementing stifling and unnecessary red tape around the growing AI sector, urging that 'technology-specific regulations' should be used 'as a last resort'. In what is the body's third out of five reports ahead of the Albanese government's economic reform roundtable later this month, the Productivity Commission found AI could 'likely' boost productivity by 2.3 per cent and labour productivity growth of 4.6 per cent, or $116bn, over the next decade. While the PC warned there was 'considerable uncertainty' in the figures, it listed examples like fraud detection and warnings by banks, robotic sorting in agriculture and teaching tools at unis and schools. The report, released on Tuesday, urged the government to use existing regulations as the starting point, however 'burdensome regulation' and a lack of certainty was disincentivising investment appetite in the sector. The regulation of AI-based medical devices through the TGA was used as an example in the report, noting that if a device already fulfils the guardrails set by the regulatory body, the government shouldn't raise the regulatory burden which would force companies to demonstrate further compliance. Commissioner Stephen King said regulation should be used to limit the risks, but not stifle growth potential. Risks were identified as bias and discrimination, mistakes, emission of information and threats from harmful actors like the spread of fake content to manipulate public opinion. 'Like any new technology, AI comes with risks. But we can address many of these risks by refining and amending the rules and frameworks we already have in place,' Commissioner King said. 'Adding economy-wide regulations that specifically target AI could see Australia fall behind the curve, limiting a potentially enormous growth opportunity.' On the impact of AI on the workforce, the report also acknowledged that while technology changes will 'inevitably' involve 'painful transitions' and job losses, it could also lead to a greater demand 'for other tasks performed by humans'. 'To the extent significant job displacement does occur the Australian government may need to consider support for retraining of workers, as has occurred in the past when there have been changes to the way jobs are undertaken,' it said. 'The social safety net of unemployment assistance would also be available.' The role of AI in boosting productivity will be heavily discussed at the upcoming economic reform roundtable from August 19-21, with one session set to be dedicated to 'AI and innovation'. The session will also be attended by Strategic Examination of Research and Development chair Robyn Denholm and CSIRO chair Ming Long, Treasurer Jim Chalmers confirmed on Tuesday. Mr Chalmers said he was 'optimistic' about the ability for AI to 'completely transform our economy' and lift living standards, and said the government was 'realistic about the risks'. 'We're confident we can deploy artificial intelligence in a way consistent with our values if we treat it as an enabler not an enemy, by listening to and empowering workers to adapt and augment their work,' he said. 'AI will be a key concern of the economic reform roundtable I'm convening this month because it has major implications for economic resilience, productivity, and budget sustainability.'
