From Laos to Brazil, Trump's tariffs leave a lot of losers. But even the winners will pay a price

San Francisco Chronicle​

2 days ago

WASHINGTON (AP) — President Donald Trump's tariff onslaught this week left a lot of losers – from small, poor countries like Laos and Algeria to wealthy U.S. trading partners like Canada and Switzerland. They're now facing especially hefty taxes – tariffs – on the products they export to the United States starting Aug. 7.
The closest thing to winners may be the countries that caved to Trump's demands — and avoided even more pain. But it's unclear whether anyone will be able to claim victory in the long run — even the United States, the intended beneficiary of Trump's protectionist policies.
'In many respects, everybody's a loser here,'' said Barry Appleton, co-director of the Center for International Law at the New York Law School.
Barely six months after he returned to the White House, Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. In its place is a system in which Trump himself sets the rules, using America's enormous economic power to punish countries that won't agree to one-sided trade deals and extracting huge concessions from the ones that do.
'The biggest winner is Trump,' said Alan Wolff, a former U.S. trade official and deputy director-general at the World Trade Organization. 'He bet that he could get other countries to the table on the basis of threats, and he succeeded – dramatically.''
Everything goes back to what Trump calls 'Liberation Day'' – April 2 – when the president announced 'reciprocal'' taxes of up to 50% on imports from countries with which the United States ran trade deficits and 10% 'baseline'' taxes on almost everyone else.
He invoked a 1977 law to declare the trade deficit a national emergency that justified his sweeping import taxes. That allowed him to bypass Congress, which traditionally has had authority over taxes, including tariffs — all of which is now being challenged in court.
Trump retreated temporarily after his Liberation Day announcement triggered a rout in financial markets and suspended the reciprocal tariffs for 90 days to give countries a chance to negotiate.
Eventually, some of them did, caving to Trump's demands to pay what four months ago would have seemed unthinkably high tariffs for the privilege of continuing to sell into the vast American market.
The United Kingdom agreed to 10% tariffs on its exports to the United States — up from 1.3% before Trump amped up his trade war with the world. The U.S. demanded concessions even though it had run a trade surplus, not a deficit, with the UK for 19 straight years.
The European Union and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year — but lower than the tariffs he was threatening (30% on the EU and 25% on Japan).
Also cutting deals with Trump and agreeing to hefty tariffs were Pakistan, South Korea, Vietnam, Indonesia and the Philippines.
Even countries that saw their tariffs lowered from April without reaching a deal are still paying much higher tariffs than before Trump took office. Angola's tariff, for instance, dropped to 15% from 32% in April, but in 2022 it was less than 1.5%. And while Trump administration cut Taiwan's tariff to 20% from 32% in April, the pain will still be felt.
'20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate,' Taiwan's president Lai Ching-te told reporters in Taipei Friday.
Trump also agreed to reduce the tariff on the tiny southern African kingdom of Lesotho to 15% from the 50% he'd announced in April, but the damage may already have been done there.
Bashing Brazil, clobbering Canada, shellacking the Swiss
Countries that didn't knuckle under — and those that found other ways to incur Trump's wrath — got hit harder.
Even some of the poor were not spared. Laos' annual economic output comes to $2,100 per person and Algeria's $5,600 — versus America's $75,000. Nonetheless, Laos got rocked with a 40% tariff and Algeria with a 30% levy.
Trump slammed Brazil with a 50% import tax largely because he didn't like the way it was treating former Brazilian President Jair Bolsonaro, who is facing trial for trying to lose his electoral defeat in 2022. Never mind that the U.S. has exported more to Brazil than it's imported every year since 2007.
Trump's decision to plaster a 35% tariff on longstanding U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu.
Switzerland was clobbered with a 39% import tax — even higher than the 31% Trump originally announced on April 2.
"The Swiss probably wish that they had camped in Washington'' to make a deal, said Wolff, now senior fellow at the Peterson Institute for International Economics. "They're clearly not at all happy.''
Fortunes may change if Trump's tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his Liberation Day tariffs exceeded his authority under the 1977 law.
In May, the U.S. Court of International Trade, a specialized court in New York, agreed and blocked the tariffs, although the government was allowed to continue collecting them while its appeal wend its way through the legal system, and may likely end up at the U.S. Supreme Court. In a hearing Thursday, the judges on the U.S. Court of Appeals for the Federal Circuit sounded skeptical about Trump's justifications for the tariffs.
'If (the tariffs) get struck down, then maybe Brazil's a winner and not a loser,'' Appleton said.
Paying more for knapsacks and video games
Trump portrays his tariffs as a tax on foreign countries. But they are actually paid by import companies in the U.S. who try to pass along the cost to their customers via higher prices. True, tariffs can hurt other countries by forcing their exporters to cut prices and sacrifice profits — or risk losing market share in the United States.
But economists at Goldman Sachs estimate that overseas exporters have absorbed just one-fifth of the rising costs from tariffs, while Americans and U.S. businesses have picked up the most of the tab.
Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel and Stanley Black & Decker, have all hiked prices due to U.S. tariffs
"This is a consumption tax, so it disproportionately affects those who have lower incomes,'' Appleton said. 'Sneakers, knapsacks ... your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to up because none of those are made in America.''
Trump's trade war has pushed the average U.S. tariff from 2.5% at the start of 2025 to 18.3% now, the highest since 1934, according to the Budget Lab at Yale University. And that will impose a $2,400 cost on the average household, the lab estimates.