How businesses around the world are responding to US tariff hikes

Indian Express

a day ago

Businesses around the world are scrambling to assess the impact of steep new US tariffs, after President Donald Trump on late Thursday imposed higher duties on countries without updated trade agreements with Washington. According to Reuters, the US Customs and Border Protection agency began collecting the higher tariffs, ranging from 10 per cent to 50 per cent on Friday.
The new measures push the average US import duty to its highest level in a century, up from just 2.5 per cent when President Trump took office in January.
Trump has defended the move as necessary to 'rebalance' trade and boost US manufacturing, claiming on Truth Social that 'billions of dollars… will start flowing into the USA.'
India has been hit with a 25% tariff, with Trump also threatening an additional, unspecified penalty over New Delhi's purchases of Russian oil.
Aurobindo Nayak, who runs CI Ltd, a large tea exporter in Kolkata, told the BBC that premium Indian teas like Assam and Darjeeling will become more expensive in the US. 'We will definitely bear the brunt. But I think the people who are really going to be hit hard are the American consumers themselves,' Nayak said.
'To choose to tax tea in the United States is only going to have an inflationary effect. Assam tea has a lot of character, it is liked by the American consumers. Darjeeling tea is a specialty tea, it's not grown anywhere else. Consumption in the US is growing.'
Additionally, Prime Minister Narendra Modi has said he will not compromise the interests of Indian farmers.
Thailand negotiated its expected 36% tariff down to 19%.
Richard Han, CEO of Hana Microelectronics, said the lower rate means buyers are less likely to switch suppliers, calling it 'just… a tax, like VAT' for US consumers, reported BBC.
Laos received one of the steepest hikes at 40%.
Xaybandith Rasphone, vice-president of the Lao national chamber of commerce, said 60 companies employing nearly 60,000 people could be affected, warning of significant indirect job losses.
Canada's tariffs rose from 25% to 35%, though many goods remain exempt under an existing North American trade treaty. But higher raw material costs could still bite.
David Hope, vice president of Canadian aircraft component maintenance firm Hope Aero, told the BBC he expects a 'blanket 10%' vendor price hike soon, as steel and aluminium, both under 50 per cent tariffs, grow more expensive. 'Steel and aluminium are becoming more expensive in the US, so they're going to pass those costs right along,' he told the BBC.
Mexico avoided immediate increases, securing a 90-day reprieve.
Jaime Chamberlain, who imports millions of boxes of Mexican produce annually, said negotiators on both sides were keeping 'cool heads' but warned that without a deal, 'many farmers would just stop farming for the export market.'
The European Union (EU) struck a deal capping most tariffs at 15 per cent, up from 4.8%. The Italian Institute of International Political Studies projects the country's GDP will dip 0.2 per cent, with agriculture, pharmaceuticals, and automotive sectors hit hardest.
Cristiano Fini of the Italian Confederation of Farmers described the deal as 'a surrender,' than an agreement, reported BBC.
Switzerland faced a surprise 39% rate, the highest in Europe. President Karin Keller-Sutter returned from last-minute talks in Washington without securing the previously discussed 10 per cent cap.
Swissmechanic, representing the machine tool industry, called the US move a 'clear protectionist signal' as per BBC. 'The government must now act with clarity and confidence, and make determined use of the existing window of opportunity for negotiations with the US.'
Brazil saw its tariff jump from 10 per cent to 50 per cent after Trump accused President Luiz Inacio Lula da Silva of unfairly targeting US tech firms.
While orange juice and aircraft are exempt, Cecafé, Brazil's coffee exporters' council, warned of a 'significant' impact and potential price hikes for US consumers. Finding alternative buyers for the 8.1 million tonnes exported to the US annually will be difficult, the group said.
Trump announced his 'Liberation Day' tariffs in April, but has modified rates several times since. His broader strategy also includes potential 100% duties on semiconductors. China, on a separate track, faces possible tariff hikes in August unless a truce is extended.
Some countries, including India, China, and Brazil, are exploring a coordinated response via the BRICS bloc, Reuters reported.
(With inputs from BBC, Reuters)