Average US tariffs top 20%, back to 1910s levels: WTO and IMF
The figure is far above the 2.4 per cent average in place when President Donald Trump took office on Jan 20, 2017.
Trump's April 2 announcement of 'reciprocal' tariffs on the United States' main trading partners, followed by further increases on Chinese goods, briefly drove the average rate to 24.8 per cent in May, a figure last seen in 1904, according to the United States International Trade Commission.
A trade truce later eased the record tariff levels between Washington and Beijing, but that arrangement is set to expire next week.
TRADE DEALS AND NEW DUTIES
The WTO and IMF calculations factor in recent US trade agreements with the European Union, Japan, South Korea and other nations, which have now taken effect.
The figures also include the latest US tariffs applied to Brazil, Canada and imports of semi-finished copper. These agreements generally imposed lower tariffs than those threatened by Trump in April, but were still higher than the baseline 10 per cent rate introduced earlier in his administration.
RATES AT HISTORIC HIGHS
The updated average exceeds the nearly 20 per cent rate the United States imposed in the 1930s – an era of protectionism that economists widely believe deepened and prolonged the Great Depression.
However, the WTO and IMF stressed that the rate is based on 2024 trade volumes. Actual impacts may differ, as companies have already altered behaviour by stockpiling goods, delaying purchases or shifting suppliers to avoid higher duties.
According to the Budget Lab at Yale University, once changes in consumption patterns and knock-on effects are considered, the effective rate could drop to about 17.7 per cent – unless Trump imposes further duties.
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Business Times
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- Business Times
Tariff heat sees Europe heighten focus on Vietnam and Indonesia
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Stephen Olson, former US trade negotiator and visiting senior fellow at Iseas-Yusof Ishak Institute echoed the sentiment: 'The EU is clearly attempting to diversify its trade relations away from the US, and Asean is a key focal point.' Recent developments, including the breakthrough Indonesia-EU Comprehensive Economic Partnership Agreement (Cepa) and sector-specific pacts such as the UK-Vietnam pharmaceutical deal, underscore this structural shift. The pivot is evident from recent Allianz Trade surveys before and after the US' 'Liberation Day' tariffs on Apr 2, which found that European export interest towards South and South-east Asia doubled from 7 per cent to 14 per cent as trade links between the regions are intensifying with more free-trade agreements (FTAs). A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The shifting sentiments were more evident when it came to supply-chain exposures. 'The trade war is creating opportunistic friendshoring (with) the Europe-Asia rapprochement,' Allianz analysts wrote. They pointed out that the Asia-Pacific has now become the preferred relocation destination for German companies with current links to North American supply chains – with 43 per cent opting for this, rising sharply from 28 per cent. 'We see a lot of manufacturing and industrial companies leveraging Vietnam as an expansion, and it creates opportunities for wider exchange (between Vietnam and Europe),' said Thomas Saueressig, member of the executive board of SAP, during a press briefing on Aug 7 to launch its new SAP Labs in Ho Chi Minh City. The German enterprise software giant plans to invest more than 150 million euros over the next five years to strengthen its engineering hub in Vietnam, the second in South-east Asia following the one established in Singapore in 2022. '(How we try to boost SAP Labs here) is also a great next signal for more and further increased collaborations and partnerships across industries from Germany, Europe, to South-east Asia, specifically in Vietnam,' he added. Europe is not stopping at Indonesia or Vietnam. The Philippines embarked on a fresh round of FTA talks with the EU in June, with the next one scheduled in October. Negotiations with Malaysia and Thailand are also ongoing, and are at various stages. 'Once (the Indonesia-EU Cepa) is signed, I believe it opens the way for further conclusions and negotiations with other Asean member states,' said Edison Bako, executive director at the European Business Chamber of Commerce (EuroCham) in Indonesia. One of the key challenges for these countries, according to Olson, will be navigating differing perspectives on values-driven social issues and climate change – areas that the EU increasingly intertwines with its trade policies. Indonesian President Prabowo Subianto meeting European Commission President Ursula von der Leyen in Brussels on Jul 13. PHOTO: INDONESIA PRESIDENTIAL SECRETARIAT Indonesia-EU Cepa: Catalyst for broader engagement Politically concluded on Jul 14, 2025, the Indonesia-EU Cepa is set for legal finalisation by September and is poised to serve as a template for Europe's wider strategy in Asean. Under the Cepa, approximately 80 per cent of Indonesia's exports to the EU – including textiles, footwear, fisheries, palm oil and electric vehicle (EV)-related components – will benefit from immediate or gradual tariff elimination, boosting export competitiveness and improving market access. In return, EU companies will gain wider access to Indonesia's rapidly growing market of 280 million consumers, with key export opportunities in meat, dairy products and green technologies. Trade between the two sides is projected to grow by 50 per cent or more in the coming years under the new framework. '(The deal) would also open the floodgates in terms of the prospects for environmental sustainability and governance standards here in Asean,' added Bako. Europe has emerged as one of the top seven sources of foreign investment in Indonesia, with inflows reaching US$4.59 billion in 2024, up 52 per cent from US$3.02 billion in the previous year, driven by growing interest in the EV, healthcare and resource sectors. 'The ongoing uncertainty in EU-US trade relations is prompting many to look more seriously at Asean,' said Fabian Kieble, chairman of EuroCham in Indonesia. 'Indonesia's EV battery and mining sectors are key areas of interest. The country's push for EVs aligns well with European expertise,' he added. Vietnam-UK sectoral strategy Vietnam has been playing a key role in Europe's Asia strategy, with the UK-Vietnam pharmaceutical agreement – confirmed on the same day as the announcement of the Cepa between the EU and Indonesia – symbolising deeper engagement. 'We expect the diversification of trade partners this agreement provides to enhance the UK's resilience against global trade uncertainties while creating new growth opportunities in emerging markets across Asia,' Rachel Finlay, healthcare analyst at BMI, a unit of Fitch Solutions, wrote in a note last month. The deal removes non-tariff barriers for UK pharmaceutical exports and reinforces the Medicines and Healthcare products Regulatory Agency's standards as an internationally recognised benchmark – a move that could ripple through other Asean markets. Sakshi Sikka, associate director of pharmaceuticals at BMI, added: 'This agreement also strengthens Vietnam's broader trade relationship with the UK, which could lead to expanded cooperation in other sectors such as finance and clean energy.' 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He highlighted initiatives such as the Johor-Singapore Special Economic Zone, announced earlier this year, as a strategic location that enables European companies to leverage the combined strengths of both Malaysia and Singapore to diversify their supply chains and continue scaling. Additional reporting by Goh Ruoxue in Singapore
Business Times
5 hours ago
- Business Times
Tariff heat sees Europe boost its focus on Vietnam and Indonesia
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Stephen Olson, former US trade negotiator and visiting senior fellow at Iseas-Yusof Ishak Institute echoed the sentiment: 'The EU is clearly attempting to diversify its trade relations away from the US, and Asean is a key focal point.' Recent developments, including the breakthrough EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA) and sector-specific pacts such as the UK-Vietnam pharmaceutical deal, underscore this structural shift. The pivot is supported by recent Allianz Trade surveys before and after the US' 'Liberation Day' tariffs on Apr 2, which found that European export interest towards South and South-east Asia doubled from 7 per cent to 14 per cent as trade links between the regions are intensifying with more free-trade agreements (FTAs). A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The shifting sentiments were more evident when it came to supply-chain exposures. 'The trade war is creating opportunistic friendshoring (with) the Europe-Asia rapprochement,' Allianz analysts wrote. They pointed out that the Asia-Pacific has now become the preferred relocation destination for German companies with current links to North American supply chains – with 43 per cent opting for this, rising sharply from 28 per cent. 'We see a lot of manufacturing and industrial companies leveraging Vietnam as an expansion, and it creates opportunities for wider exchange (between Vietnam and Europe),' said Thomas Saueressig, member of the executive board of SAP, during a press briefing on Aug 7 to launch its new SAP Labs in Ho Chi Minh City. The German enterprise software giant plans to invest more than 150 million euros over the next five years to strengthen its engineering hub in Vietnam, the second in South-east Asia following the one in Singapore in 2022. '(How we try to boost SAP Labs here) is also a great next signal for more and further increased collaborations and partnerships across industries from Germany, Europe, to South-east Asia, specifically in Vietnam,' he added. Europe is not stopping at Indonesia or Vietnam. The Philippines embarked on a fresh round of FTA talks with the EU in June, with the next one scheduled in October. Negotiations with Malaysia and Thailand are also ongoing at various stages. 'Once (Indonesia-EU CEPA) is signed, I believe it opens the way for further conclusions and negotiations with other Asean member states,' said Edison Bako, executive director at the European Business Chamber of Commerce (EuroCham) in Indonesia. One of the key challenges for these countries, according to Olson, will be navigating differing perspectives on values-driven social issues and climate change – areas that the EU increasingly intertwines with its trade policies. Indonesian President Prabowo Subianto meeting European Commission President Ursula von der Leyen in Brussels on Jul 13. PHOTO: INDONESIA PRESIDENTIAL SECRETARIAT Indonesia-EU CEPA: Catalyst for broader engagement Politically concluded on Jul 14, 2025, the Indonesia-EU CEPA is set for legal finalisation by September and is poised to serve as a template for Europe's wider strategy in Asean. Under the CEPA, approximately 80 per cent of Indonesia's exports to the EU – including textiles, footwear, fisheries, palm oil and electric vehicle (EV)-related components – will benefit from immediate or gradual tariff elimination, boosting export competitiveness and improving market access. In return, EU companies will gain wider access to Indonesia's rapidly growing market of 280 million consumers, with key export opportunities in meat, dairy products and green technologies. Trade between the two sides is projected to grow by 50 per cent or more in the coming years under the new framework. '(The deal) would also open the floodgates in terms of the prospects for environmental sustainability and governance (ESG) standards here in Asean,' added Bako. Europe has emerged as one of the top seven sources of foreign investment in Indonesia, with inflows reaching US$4.59 billion in 2024, up 52 per cent from US$3.02 billion in the previous year, driven by growing interest in the EV, healthcare and resource sectors. 'The ongoing uncertainty in EU-US trade relations is prompting many to look more seriously at Asean,' said Fabian Kieble, chairman of EuroCham in Indonesia. 'Indonesia's EV battery and mining sectors are key areas of interest. The country's push for EVs aligns well with European expertise,' he added. Vietnam-UK sectoral strategy Vietnam has been playing a key role in Europe's Asia strategy, with the UK-Vietnam pharmaceutical agreement – confirmed on the same day as the announcement of CEPA between the EU and Indonesia – symbolising deeper engagement. 'We expect the diversification of trade partners this agreement provides to enhance the UK's resilience against global trade uncertainties while creating new growth opportunities in emerging markets across Asia,' Rachel Finlay, healthcare analyst at BMI, a unit of Fitch Solutions, wrote in a note last month. The deal removes non-tariff barriers for UK pharmaceutical exports and reinforces the Medicines and Healthcare products Regulatory Agency's standards as an internationally recognised benchmark – a move that could ripple through other Asean markets. 'This agreement also strengthens Vietnam's broader trade relationship with the UK, which could lead to expanded cooperation in other sectors such as finance and clean energy,' Sakshi Sikka, associate director of pharmaceuticals at BMI, added. Clarence Hoe, executive director of Americas and Europe at Enterprise Singapore also observed increased interest from European companies to participate in renewable energy infrastructure projects in South-east Asian markets due to the latter's vast potential and commitment to net zero targets, as well as pro-energy transition policies. Pha Lai thermal power plant in Hai Duong province, Vietnam. The UK and EU are the co-leads of the International Partners Group, which has been working with Hanoi to implement Vietnam's Just Energy Transition Partnership since December 2022. PHOTO: AFP Singapore: Asean's entry point for European firms While emerging South-east Asian economies present huge growth potential, Singapore remains Europe's launch pad into the region, with more than 19,000 European companies operating in the city-state. Recent manufacturing investments by Sanofi, Biotronik, Siltronic and NTS in Singapore highlight the 'queen bee' effect – where global firms cluster their suppliers and partners around the South-east Asian region, said Dino Tan, senior vice-president and head of Europe at Singapore Economic Development Board. Following the Europe-Singapore Digital Trade Agreement, which was finalised last year, London-headquartered fintech Wise expanded its Asia-Pacific hub in Singapore in April to better serve markets in the region. Norwegian gamified learning platform Kahoot launched its Asia-Pacific hub in the Republic in July, using Singapore as a gateway for its regional growth. 'Singapore is deepening regional economic integration within South-east Asia, which will make it easier for companies to do business in our region,' Tan noted. He highlighted initiatives such as the Johor-Singapore Special Economic Zone, announced earlier this year, as a strategic location that enables European companies to leverage the combined strengths of both Malaysia and Singapore to diversify their supply chains and continue scaling. Additional reporting by Goh Ruoxue in Singapore
Business Times
8 hours ago
- Business Times
Nvidia H20 chips not safe for China: state media
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