Dollar strong as Trump imposes new tariff rates
US President Donald Trump set new tariff rates on dozens of trade partners.
The yen touched a four-month low against the greenback, extending its steep decline from Thursday after the Bank of Japan signalled it was in no hurry to resume interest rate hikes.
In trade-related moves, the US currency gained ground on the Swiss franc after Trump set a 39% tariff rate on Swiss imports, up from the 31% he previously mooted. Canada's dollar dipped to a more than two-month trough after the country received a 35% levy instead of an earlier threatened 25%. The euro remained pinned near an almost two-month low, as it continues to be weighed down by what markets see as a lopsided trade agreement with Washington.
The US dollar stayed strong even though Trump continued his attacks on Federal Reserve Chair Jerome Powell overnight, calling him a 'terrible' Fed Chair and calling his own decision to appoint Powell to the position a 'mistake'.
Trump's repeated threats to fire Powell and calls for the Fed to drastically cut rates has put the central bank's independence in question, hurting the dollar in recent months.
The US dollar index - which measures the currency against a basket of six major peers including the euro, yen, Swiss franc and Canada's loonie - pushed as high as 100.10 overnight, topping 100 for the first time since May 29.
The yen changed hands at 150.64 per dollar after dipping to 150.89 per dollar early on Friday, its weakest since March 28.
The euro hovered around $1.1420, not straying far from Wednesday's low of $1.1401, a level not seen since June 10.
The franc eased as much as 0.26% to 0.8120 per dollar.
The loonie slipped 0.12% to plumb its lowest since May 22 at C$1.3872 versus its US peer.
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Express Tribune
6 hours ago
- Express Tribune
The new trade colonialism
On August 1, as the clock struck midnight Eastern Time, a new era in global trade was inaugurated — one that might be remembered not for its reciprocity or fairness, but for the brute leverage of American power. With the rollout of sweeping new reciprocal tariffs under President Donald Trump's so-called 'Liberation Day' strategy, dozens of nations were forced into last-minute trade deals that, beneath the surface, bear a striking resemblance to the 'unequal treaties' of the 19th century. Only this time, they were not written at gunpoint, but under threat of economic coercion. The United States, claiming to be correcting trade deficits and restoring domestic manufacturing, has essentially coerced trading partners into accepting higher tariffs, ceding regulatory ground and committing to strategic economic realignments, all while ensuring minimal concessions on its own part. For countries such as Vietnam and Indonesia, and even the European Union, the consequences could be far-reaching, reshaping industrial policies, altering investment incentives and, most importantly, undermining economic sovereignty. The Trump administration's public rationale for this aggressive trade overhaul is the need to rebalance global trade deficits. The claim is straightforward: the US has been losing in trade and it's time to 'even the playing field.' However, this rhetoric masks a complex and asymmetric web of tariffs and conditions that belie the supposed principle of reciprocity. Take Vietnam, for instance. Under its deal with Washington, Hanoi agreed to a 20% tariff on most exports to the US, plus a staggering 40% levy on transshipped goods; a direct blow to Vietnam's unique status as a production hub for global giants like Foxconn, Apple, Intel, and Nike. With 71.7% of Vietnamese exports coming from foreign-invested enterprises, this transshipment clause is more than a customs technicality; it strikes at the heart of Vietnam's export-driven growth model. In return Vietnam was pressured into offering zero tariffs on select US imports, including large-engine automobiles, an almost negligible sector in Vietnam's domestic market but a significant win for US exporters. Indonesia, similarly, secured a slightly lower tariff rate — 19% instead of the initially threatened 32% — but only by agreeing to purchase US Boeing aircraft and remove or reduce various trade barriers. Beyond tariffs, the deals increasingly intrude upon the internal economic policies of sovereign states. Embedded in these trade arrangements are demands regarding "transshipment restrictions" and "supply chain security" — vague yet powerful instruments that allow the US to dictate how and where its partners manufacture goods. These clauses give Washington indirect influence over national industrial strategies, particularly in countries where foreign direct investment forms the backbone of growth. For the European Union, the stakes are no less severe. The deal demanded a $600 billion investment from EU states into the US economy, effectively exporting European capital and potentially jobs to American soil. Even more contentious is the clause requiring the EU to buy $750 billion worth of US energy over three years, a move that French officials bluntly called 'capitulation.' Energy policy, long considered a pillar of national sovereignty, is now subordinated to bilateral trade enforcement mechanisms. In trade diplomacy, access to the US consumer market is perhaps the most coveted prize. The Trump administration has weaponised this leverage to extract far-reaching concessions. For some countries, the alternative to signing a deal is punitive: Mexico faces a 25% blanket tariff and Canada, a top US trading partner, could see tariffs of up to 35% on goods not compliant with the existing USMCA. Meanwhile, India — despite being dubbed a 'friend' by Trump — has been hit with a 25% tariff across the board, plus an unspecified penalty tied to its energy dealings with Russia. Such measures reinforce the view that these 'agreements' are less about trade and more about aligning partners with US geopolitical objectives. Even where countries managed to avoid worst-case tariffs, the deals were often asymmetrical. South Korea, for example, agreed to a 15% tariff rate on its exports while pledging $350 billion in US investments and granting zero tariffs on American agricultural and automobile exports. These are not trade negotiations in the traditional sense. They are economic ultimatums wrapped in diplomatic language. Ironically, while these deals are framed as a win for American workers, they may end up harming US consumers and industries. According to the Yale Budget Lab, the average US household could face $2,400 in additional annual costs due to higher prices on imported goods — effectively a hidden tax. Moreover, American industries that rely on foreign components, like electronics, pharmaceuticals, and textiles, will face disrupted supply chains and rising production costs. This suggests that the primary beneficiaries of these aggressive trade deals are not US consumers or workers, but rather a political narrative built around economic nationalism and short-term geopolitical gains. What makes these modern trade pacts so unsettling is how closely they echo the 'unequal treaties' of colonial history. In the 19th century, Western powers extracted lopsided agreements from Asian nations, forcing them to open ports, accept foreign jurisdiction and buy unwanted goods. Today, the US is not demanding extraterritorial rights, but it is imposing conditions that interfere with national industrial policies, force purchases of US products, and limit the autonomy of states to craft their own trade strategies. In the longer term, this coercive trade strategy may backfire by undermining the very multilateral institutions that have governed global trade for decades. The World Trade Organisation, already weakened, is increasingly sidelined as bilateral power politics dominate. Meanwhile, countries that feel cornered by US tactics may seek alternative trading blocs, perhaps turning to China, regional groupings, or even forming counter-alliances. Pierre-Olivier Gourinchas, chief economist at the IMF, warned this week of the broader risk: 'Restoring stability in trade policy is essential to reduce policy uncertainty… Collective efforts should be made to restore and improve the global trading system,' Al Jazeera quoted him as saying. His words are a plea not just for economic sanity, but for the preservation of a rules-based order. While the US has every right to renegotiate trade terms that it deems unfair, fairness must be mutual. These new 'agreements,' far from establishing equitable exchange, are imposing a 21st-century version of the unequal treaty — a shift that may have profound consequences for global diplomacy, development and international economic cooperation.
Express Tribune
8 hours ago
- Express Tribune
India undeterred by Trump threats
Listen to article India will keep purchasing oil from Russia despite US President Donald Trump's threats of penalties, two Indian government sources told Reuters on Saturday, not wishing to be identified due to the sensitivity of the matter. On top of a new 25% tariff on India's exports to the US, Trump indicated in a Truth Social post last month that India would face additional penalties for purchases of Russian arms and oil. On Friday, Trump told reporters he had heard that India would no longer be buying oil from Russia. But the sources said there would be no immediate changes. "These are long-term oil contracts," one of the sources said. "It is not so simple to just stop buying overnight." Justifying India's oil purchases from Russia, a second source said India's imports of Russian grades had helped avoid a global surge in oil prices, which have remained subdued despite Western curbs on the Russian oil sector. Unlike Iranian and Venezuelan oil, Russian crude is not subject to direct sanctions, and India is buying it below the current price cap fixed by the European Union, the source said. The New York Times also quoted two unnamed senior Indian officials on Saturday as saying there had been no change in Indian government policy. Indian government authorities did not respond to Reuters' request for official comment on its oil purchasing intentions. However, during a regular press briefing on Friday, foreign ministry spokesperson Randhir Jaiswal said India has a "steady and time-tested partnership" with Russia. "On our energy sourcing requirements ... we look at what is there available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances," he said. The White House did not immediately respond to requests for comment. India's top supplier Trump, who has made ending Russia's war in Ukraine a priority of his administration since returning to office this year, has expressed growing impatience with Russian President Vladimir Putin in recent weeks. He has threatened 100% tariffs on US imports from countries that buy Russian oil unless Moscow reaches a major peace deal with Ukraine. Russia is the leading supplier to India, the world's third-largest oil importer and consumer, accounting for about 35% of its overall supplies. India imported about 1.75 million barrels per day of Russian oil from January to June this year, up 1% from a year ago, according to data provided to Reuters by sources. But while the Indian government may not be deterred by Trump's threats, sources told Reuters this week that Indian state refiners stopped buying Russian oil after July discounts narrowed to their lowest since 2022 — when sanctions were first imposed on Moscow — due to lower Russian exports and steady demand. Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd have not sought Russian crude in the past week or so, four sources told Reuters. Nayara Energy — a refinery majority-owned by Russian entities, including oil major Rosneft, and major buyer of Russian oil — was recently sanctioned by the EU. Reuters
Express Tribune
10 hours ago
- Express Tribune
ExxonMobil likely to come back for offshore venture
Listen to article As Pakistan is celebrating US President Donald Trump's announcement of joint development of Pakistan's oil reserves, Washington has not signalled whether its energy giant ExxonMobil will make a comeback to participate in bidding for offshore oil and gas fields. Though Pakistan and the US have a long history of relationship, American oil and gas companies have not remained very active here. Pakistan's two provinces – Khyber-Pakhtunkhwa and Balochistan— are rich in oil and gas deposits, however, security challenges have hindered progress on potential projects. Distrust between Pakistan and the US still prevails as conspiracy theories suggest that offshore fields in Karachi seawaters have significant hydrocarbon reserves. Many people believe that Pakistan did not allow ExxonMobil to go further beyond in sea for offshore exploration during the tenure of Pakistan Tehreek-e-Insaf (PTI) government. Reports indicate that the US company sought access to an additional area in Kekra field to assess prospects of finding oil and gas but Pakistan expressed hesitation. Now, the US president has struck a new agreement for oil and gas field development in Pakistan. It comes at a time when Islamabad is inviting foreign companies to submit bids for offshore fields, which will open on September 30. Background discussions with officials revealed that the US had scores of private energy companies, but there were no signals which one would take part in field development. Pakistan expects ExxonMobil to come back for a new offshore exploration venture. However, Pakistani officials point out that Trump's announcement is just a commitment that US energy companies will come to Pakistan. "It will be clear in the coming days when the two countries will start official-level talks by including energy companies to look for opportunities of joint ventures," remarked an official. This is encouraging news as the US has been inclined towards India in the past. Even Indian oil and gas companies had formed joint ventures with US firms. Earlier, Washington even refused to export liquefied natural gas (LNG) to Pakistan and showed interest in dealing with Delhi. At that time, a US embassy official told media that Indian companies had entered into joint ventures with US firms; therefore, the doors for LNG trade were open for India, not Pakistan. Of late, the US president has hinted at American companies' investment in Pakistan's mineral sector. US Exim Bank is one of the financiers interested in pumping capital into the Reko Diq copper and gold mining project. US companies are also keen to forge joint ventures with Pakistani firms in the mineral sector, which has estimated potential worth $8 trillion. Experts call it a new opening in bilateral relationship between Pakistan and US that will clear the way for notable investment.
