Latest news with #ISEAS
The Star
6 days ago
- Business
- The Star
News Analysis - Philippines gets minor US tariff cut, but defence ties remain intact
MANILA: Philippine President Ferdinand Marcos Jr flew to Washington on Sunday (July 20), hoping to turn warm diplomatic ties with the US into tangible economic gains. But instead of a breakthrough, he is returning to Manila with a modest concession: a 1-percentage point cut in the reciprocal tariff rate on Philippine exports to the US, from 20 per cent to 19 per cent. In exchange, the Philippines agreed to remove tariffs on key American goods, including cars. It was not the outcome Manila had hoped for. The new rate is still higher than the 17 per cent announced in April by US President Donald Trump, and analysts say it spotlights the Philippines' limited bargaining power when dealing with an unpredictable but transactional US partner. Philippine trade negotiators had initially aimed to secure a free trade agreement or a bilateral comprehensive economic partnership deal. 'Well, that's how negotiations go,' Marcos told reporters hours after Trump announced the revised tariff rate on his Truth Social platform. 'When we arrived here in Washington, the tariff rate was 20 per cent... so we tried very hard to see what we can do,' he added, referring to the 1-percentage-point decrease. That cut came at a cost. Marcos confirmed the Philippines would open up previously protected sectors, including car imports from the US. Other American goods set to receive zero tariffs are still being determined. The Philippines also committed to buying more US products such as soya beans, wheat and medication, which Marcos framed as a move to help Filipinos access more affordable essential goods. US Secretary of State Marco Rubio said on July 23 that the US is set to give the Philippines some US$60 million (S$76 million) in foreign assistance funding to support energy, maritime and economic growth programmes. Rubio said the State Department also plans to work with the US Congress to allocate US$15 million to support investments and job creation along the Luzon Economic Corridor, a trilateral initiative with Japan and the Philippines launched in April 2024 to boost infrastructure and connectivity across Manila and surrounding provinces. Lopsided deal? Still, the asymmetry in the deal is hard to ignore. While Trump praised Marcos as a 'strong negotiator' during their joint press conference ahead of their bilateral meeting, he also quipped that the Philippine President was 'negotiating too tough', hinting that a larger concession had been left on the table. The result, analysts say, was not a clear win for Manila, but a strategic compromise. Dr Aries Arugay, visiting senior fellow at the ISEAS – Yusof Ishak Institute in Singapore and chairman of the University of the Philippines' Political Science Department, described the outcome as underwhelming. 'We are worse off than the original' position of the Philippines, he told The Straits Times, noting that South-east Asian neighbours like Vietnam and Indonesia had secured steeper tariff reductions from the Trump administration. 'Marcos was really hoping to make economic gains out of this trip. Unfortunately... the general outcome was not really what was expected,' Dr Arugay said. For Washington, success in this negotiation was always going to be measured differently. Trump appeared content with the outcome, and he did not press the Philippines to increase its defence spending, as he has done with other allies. Manila may have accepted the limited economic gain to preserve goodwill with its treaty ally amid rising tensions with Beijing over the South China Sea, said Georgi Engelbrecht, senior analyst for the Philippines at the International Crisis Group. 'I have a feeling (the Marcos government) was also thinking the priority is to keep Trump close to us, and what we can get is what we can get... It's not perfect, but it could have been worse,' Engelbrecht told ST. Strong military ties Still, the Philippines was able to reaffirm its longstanding defence ties with the US, one of the key goals of Marcos' trip. In that sense, both Dr Arugay and Engelbrecht said Marcos achieved what he needed: a reaffirmation of military cooperation with the US, no public scolding from Trump, and enough progress to signal continuity in the alliance – even if it fell short of a clear economic win. Both Trump and Marcos voiced support for a planned US-funded ammunition production and logistics hub in Subic, a former US military base turned freeport zone located north-west of Manila. Touting America's military stockpiles, Trump said the ammunitions hub is 'very important' and part of broader US efforts to bolster its posture in the Indo-Pacific, where Washington is locked in a rivalry for influence with China. Marcos cast the project as part of his administration's 'self-reliant defence programme', aimed at modernising the Armed Forces of the Philippines and reducing dependence on foreign suppliers. 'It will help the Philippine modernisation of the military,' said Dr Arugay, but added that it also 'really reinforces American presence in the country through the EDCA sites'. He was referring to the Filipino military bases that American troops have access to under the Enhanced Defence Cooperation Agreement. The US initially had access to five bases, but Marcos expanded that to nine in 2023. The proposed ammunition facility, initiated under the Biden administration with bipartisan support in the US Congress, is not without risks. Its location in Subic places it within striking distance of the South China Sea, raising concerns over potential escalation. But Engelbrecht downplayed those fears, saying: 'China's not going to launch a rocket just because of that alone.' What matters more is Philippine control over how such facilities are used, he added. 'These are still Philippine bases. Marcos would still need to green-light any activity that the US wants to do,' Engelbrecht said. Despite failing to get a steeper tariff cut, Marcos was the first South-east Asian leader to meet Trump at the White House since his re-election in 2024. That alone sent a signal that Marcos remains a reliable US partner, said the analysts. Yet the challenge moving forward is clear: The Philippines cannot afford to rely on the US alone. 'The Philippines must hedge and diversify, like Indonesia did with its EU trade deal,' said Engelbrecht. Dr Arugay agreed, saying: 'The Marcos administration should not put all its strategic economic and security eggs in the US basket. We must look for new markets.' - The Straits Times/ANN
The Star
11-07-2025
- Business
- The Star
Rare earth may help Indonesia persuade US to lower reciprocal tariffs, but experts remain sceptical
JAKARTA: Even as Indonesia's lead negotiator intensified lobbying efforts for a lowering of America's reciprocal tariffs this week, analysts remain sceptical that talks will make headway even if Jakarta attempts to leverage the nation's rich mineral resources as a bargaining chip. They said the US' apparently adamant rejections to Indonesia's proposals to balance trade were politically motivated, hence any offers, even those that offer economic benefit, will not make them budge. Still, plans to meet with members of the Trump administration in Washington this week went on, as Coordinating Minister for Economic Affairs Airlangga Hartarto pressed on with negotiation meetings even hours after the Monday (July 7) letter that put Indonesia's tariff rate unchanged at 32 per cent. In a text reply to The Straits Times on July 7 night, Airlangga hinted that Indonesia would continue dialogue up to Aug 1, the latest tariff deadline set by the US. He didn't elaborate. Indonesia has offered to cut tariffs on the US imports to near zero, especially for agriculture and industrial items, committed to buying US aircraft, procuring energy commodities such as natural gas and opening up to the US investment opportunities in nickel and copper smelting. These proposals have not gone anywhere. Analysts do not expect much to come out of the ongoing talks, given that there are other political and American domestic considerations. Analyst Henry Pranoto said that the tariff rates for Indonesia are largely motivated by Trump's plan to bring manufacturing jobs back to the US. 'The higher tariffs are meant to offset the gap in the minimum wages between the US and the developing countries,' said Henry, who works at a Jakarta-based investment bank. Meanwhile, Dr Nasir Tamara, a former visiting senior research fellow at ISEAS – Yusof Ishak Institute, noted that Indonesia's recent entry into Brics, a grouping of countries that include China and Russia, could also weigh on the negotiation process, as Trump has threatened an additional 10 per cent tariff on those that aligned with the 'anti-American' grouping. Still, officials are not giving up. A government official who is familiar with the negotiation, told ST that Jakarta is planning to dangle its rich, undeveloped rare earth elements (REEs) reserve as part of negotiations to reduce the 32 per cent reciprocal tariff rate set by the US as the August deadline looms. 'Twenty days is not a lot of time, but we have two things that the US really wants. One of them is rare earth,' said the official who spoke on condition of anonymity, adding that this would be Indonesia's third formal proposal to the US. He declined to provide further information on the second aspect that Indonesia was looking to leverage on. The Indonesia negotiation team had submitted in the second week of April a comprehensive letter to start negotiation, following Trump's Liberation Day tariff speech on April 2. It was addressed to the US Secretary of Commerce Howard Lutnick, containing a list of what Indonesia could do to balance trade and what the US could do in exchange. In 2024, Indonesia ran a US$17.9 billion (S$22.9 billion) trade surplus with the US. This compares to Vietnam's trade surplus at US$123 billion, Thailand's at US$45.6 billion and Malaysia's US$24.8 billion. The negotiations progressed, and Indonesian officials told reporters that the US would agree to sign a US$34 billion pact on July 7. The deal would purportedly include a pledge by Indonesian state oil and gas company Pertamina to buy significantly more fuel from the US, as well as the purchase of 75 Boeing aircraft by state-controlled airline Garuda Indonesia. As part of the deal, Indonesia would also pledge to buy more agricultural products from the US such as soybean, and its newly-formed sovereign wealth fund would invest in the oil and gas sector in Alaska. Meanwhile, US companies, such as Apple, would have easier access to sell telecommunication products in Indonesia. US firms would also have more opportunities to invest in nickel smelters to make raw materials to produce electric vehicle batteries. But the expected signing of the July 7 pact did not happen. Indonesia's rare earth industry is relatively nascent and underdeveloped, but it has potential beyond its current stated reserve, according to observers. The government is also looking to open up the industry by exploring rare earth mining permits. Rare earth – used in high-tech, energy and defence applications including missiles – was previously deployed as a negotiating weapon by China, the world's top supplier, in its trade talks with Washington. China, which controls 70 per cent of global rare earth production, had restricted the export of some rare earth minerals on April 4 – a move seen as part of its retaliatory measures against the US' tariff hikes that were announced that same month. This affected ongoing trade talks between the two superpowers. Talks later resumed, and they reached a deal in June after China agreed to release the flow of rare earth shipments while the US lifted its export countermeasures over chips, jet engines and aerospace components. Among the regions rich in rare earth in Indonesia are Humbang Hasundutan in North Sumatra province and Mamuju in West Sulawesi province. The Mamuju mine has been touted to be the first in Indonesia that would get a rare earth mining permit from the government. It contains up to 6,000 parts per million (ppm) of rare earth elements, which is roughly 0.6 per cent of the amount of earth mined. Indonesia, however, has not done as much geochemical mapping, or exploration for rare earth as China or Australia, hence a full picture of its reserve is not available, Fabby Tumiwa, executive director of the Institute for Essential Services Reform, a Jakarta think tank, told ST. But rare earths in Indonesia have also been found in tailings, or waste materials from mining operations. Indonesia's state mining holding company MIND ID said on April 24 that it is working on a pilot project to extract and process rare earth elements found in the tin-mining waste produced by PT Timah, its subsidiary, in Tanjung Ular, Bangka Belitung province. The company is seeking a foreign partner that has an advanced technology to help process monazite found in the tailings into mixed rare earth carbonate that can be further processed into pure rare earth oxides such as neodymium and praseodymium. These two rare earth elements, if combined, would become the strongest permanent magnet that is used in electric vehicles, smartphones and military equipment. - The Straits Times/ANN
Straits Times
10-07-2025
- Business
- Straits Times
Rare earth may help Indonesia persuade US to lower reciprocal tariffs, but experts remain sceptical
Sign up now: Get ST's newsletters delivered to your inbox Indonesia's rare earth industry is relatively nascent and underdeveloped, but it has potential beyond its current stated reserve, according to observers. JAKARTA – Even as Indonesia's lead negotiator intensified lobbying efforts for a lowering of America's reciprocal tariffs this week, analysts remain sceptical that talks will make headway even if Jakarta attempts to leverage the nation's rich mineral resources as a bargaining chip. They said the US' apparently adamant rejections to Indonesia's proposals to balance trade were politically motivated, hence any offers, even those that offer economic benefit, will not make them budge. Still, plans to meet with members of the Trump administration in Washington this week went on, as Coordinating Minister for Economic Affairs Airlangga Hartarto pressed on with negotiation meetings even hours after the July 7 letter that put Indonesia's tariff rate unchanged at 32 per cent. In a text reply to The Straits Times on July 7 night, Mr Airlangga hinted that Indonesia would continue dialogue up to Aug 1, the latest tariff deadline set by the US. He didn't elaborate. Indonesia has offered to cut tariffs on the US imports to near zero, especially for agriculture and industrial items, committed to buying US aircraft, procuring energy commodities such as natural gas and opening up to the US investment opportunities in nickel and copper smelting. These proposals have not gone anywhere. Analysts do not expect much to come out of the ongoing talks, given that there are other political and American domestic considerations. Analyst Henry Pranoto said that the tariff rates for Indonesia are largely motivated by Mr Trump's plan to bring manufacturing jobs back to the US. 'The higher tariffs are meant to offset the gap in the minimum wages between the US and the developing countries,' said Mr Henry, who works at a Jakarta-based investment bank. Meanwhile, Dr Nasir Tamara, a former visiting senior research fellow at ISEAS – Yusof Ishak Institute , noted that Indonesia's recent entry into Brics, a grouping of countries that include China and Russia, could also weigh on the negotiation process, as Mr Trump has threatened an additional 10 per cent tariff on those that aligned with the ' anti -American' grouping. Still, officials are not giving up. A government official who is familiar with the negotiation, told ST that Jakarta is planning to dangle its rich, undeveloped rare earth elements (REEs) reserve as part of negotiations to reduce the 32 per cent reciprocal tariff rate set by the US as the August deadline looms. 'Twenty days is not a lot of time, but we have two things that the US really wants. One of them is rare earth,' said the official who spoke on condition of anonymity, adding that this would be Indonesia's third formal proposal to the US. He declined to provide further information on the second aspect that Indonesia was looking to leverage on. The Indonesia negotiation team had submitted in the second week of April a comprehensive letter to start negotiation, following Mr Trump's Liberation Day tariff speech on April 2. It was addressed to the US Secretary of Commerce Howard Lutnick, containing a list of what Indonesia could do to balance trade and what the US could do in exchange. In 2024, Indonesia ran a US$17.9 billion (S$22.9 billion) trade surplus with the US. This compares to Vietnam's trade surplus at US$123 billion , Thailand's at US$45.6 billion and Malaysia's US$24.8 billion. The negotiations progressed, and Indonesian officials told reporters that the US would agree to sign a US$34 billion pact on July 7. The deal would purportedly include a pledge by Indonesian state oil and gas company Pertamina to buy significantly more fuel from the US, as well as the purchase of 75 Boeing aircraft by state-controlled airline Garuda Indonesia. As part of the deal, Indonesia would also pledge to buy more agricultural products from the US such as soybean, and its newly-formed sovereign wealth fund would invest in the oil and gas sector in Alaska. Meanwhile, US companies, such as Apple, would have easier access to sell telecommunication products in Indonesia. US firms would also have more opportunities to invest in nickel smelters to make raw materials to produce electric vehicle batteries. But the expected signing of the July 7 pact did not happen. Indonesia's rare earth industry is relatively nascent and underdeveloped, but it has potential beyond its current stated reserve, according to observers. The government is also looking to open up the industry by exploring rare earth mining permits. Rare earth – used in high-tech, energy and defence applications including missiles – was previously deployed as a negotiating weapon by China, the world's top supplier, in its trade talks with Washington. China, which controls 70 per cent of global rare earth production, had restricted the export of some rare earth minerals on April 4 – a move seen as part of its retaliatory measures against the US' tariff hikes that were announced that same month. This affected ongoing trade talks between the two superpowers. Talks later resumed, and they reached a deal in June after China agreed to release the flow of rare earth shipments while the US lifted its export countermeasures over chips, jet engines and aerospace components. Among the regions rich in rare earth in Indonesia are Humbang Hasundutan in North Sumatra province and Mamuju in West Sulawesi province. The Mamuju mine has been touted to be the first in Indonesia that would get a rare earth mining permit from the government. It contains up to 6,000 parts per million (ppm) of rare earth elements, which is roughly 0.6 per cent of the amount of earth mined . Indonesia, however, has not done as much geochemical mapping, or exploration for rare earth as China or Australia, hence a full picture of its reserve is not available, Mr Fabby Tumiwa, executive director of the Institute for Essential Services Reform, a Jakarta think tank, told ST. But rare earths in Indonesia have also been found in tailings, or waste materials from mining operations. Indonesia's state mining holding company MIND ID said on April 24 that it is working on a pilot project to extract and process rare earth elements found in the tin-mining waste produced by PT Timah, its subsidiary, in Tanjung Ular, Bangka Belitung province. The company is seeking a foreign partner that has an advanced technology to help process monazite found in the tailings into mixed rare earth carbonate that can be further processed into pure rare earth oxides such as neodymium and praseodymium . These two rare earth elements, if combined, would become the strongest permanent magnet that is used in electric vehicles, smartphones and military equipment.
Time of India
10-07-2025
- Business
- Time of India
Trump's 50% levy on Brazil shows world nothing is off limits
Donald Trump threatened to impose a 50% tariff on Brazil over its domestic political affairs, the most extreme case yet of the US president weaponizing trade policy to make unrelated demands. Trump cited the treatment of former President Jair Bolsonaro — a right-wing populist leader — in his letter to Brazil on Wednesday, calling on authorities to drop charges against him over an alleged coup attempt. 'This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!' Trump wrote in the letter. Brazil's leftist leader Luiz Inacio Lula da Silva fired back in a social media post, saying his nation will not be 'tutored' by anyone. He added that the case against those who planned a coup is a matter solely for the country's justice system and 'not subject to interference or threat.' by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like A failing liver is taking anshuman away! Please help him! Donate For Health Donate Now 'Any unilateral rate hikes will be responded to using Brazil's economic reciprocity law,' Lula wrote. 'The sovereignty, respect and intransigent defense of the Brazilian people's interests are what guide our relations with the world.' Trump's latest threat, against a nation that sells fewer goods to the US than it buys, risks reinforcing concerns that formal trade agreements may offer limited protection against future tariff hikes. It also again shows that the rates Trump unveiled in April on 'Liberation Day' carry little meaning. Live Events Read More | Trump imposes 50% tariff on Brazil, Lula warns of 'reciprocal measures' Trump has previously used tariff threats to accomplish other geopolitical goals. In January, he announced sweeping tariffs on Colombia before abruptly pulling the threat after reaching a deal on the return of deported migrants. He's also put 20% tariffs on China for its alleged failure to stop the flow of fentanyl to the US, and threatened BRICS nations with higher duties for undermining the dollar. Unprecedented Still, it's unprecedented for the US to add a tariff onto a foreign country to stop a judicial proceeding, according to Stephen Olson, visiting senior fellow at ISEAS–Yusof Ishak Institute and a former US trade negotiator. 'It signals to US trade partners that any and all issues that catch Trump's attention could become a problematic part of the trade agenda,' Olson said. 'It also raises questions as to whether the reciprocal tariff negotiations will ever really settle anything.' So far, Trump's flurry of new warnings have done little to rattle global markets as they did when the so-called reciprocal tariffs were announced in April, with traders focusing on Trump's overall extension of the deadline to Aug. 1. That's effectively given trading partners an extension for talks as skepticism persists on Wall Street that he will follow through on his import taxes. Currency hit But the move on Brazil shook the real, which slumped as much as 2.9% against the US dollar. US equity futures retreated amid uncertainty over the Trump administration's trade policies, with S&P 500 contracts slipping 0.2%, even as stocks gained in Europe and Asia. The Brazil letter was one of several sent by Trump on Wednesday. He levied a 30% rate on Algeria, Libya, Iraq and Sri Lanka, with 25% duties on products from Brunei and Moldova and a 20% rate on goods from the Philippines. They were largely in line with rates Trump previously announced, though he lowered them for Iraq and Sri Lanka while raising them on the Philippines, a US ally. Brazil is the first country to receive one of Trump's tariff notifications that was not on the initial list of trading partners when he announced higher so-called reciprocal tariffs in April. And the letter to Brazil also presents a warning shot to the BRICS group of developing nations, which Trump has cast as a threat to the US dollar's status as the world's key currency. Bloomberg Read More | No Trump letter for India, yet: What's happening Brazil is unusual among Trump's most recent tariff targets because it runs a deficit in trade with the US, while almost all the others post large surpluses. In 2024, Brazil imported some $44 billion of American products, while US imports from Brazil were around $42 billion, according to the Census Bureau — putting it among the top 20 American trading partners. Asked what formula he was using to determine the appropriate duty rate for trading partners, Trump told reporters at a White House event on Wednesday that it was 'based on common sense, based on deficits, based on how we've been over the years, and based on raw numbers.' 'They're based on very, very substantial facts, and also past history,' he said. Trump added to uncertainty earlier this week by claiming he was 'not 100% firm' on that new cut-off date for talks. He has since sought to signal to investors and trading partners that he is committed to carrying out his tariff threats, vowing Tuesday that 'all money will be due and payable starting AUGUST 1, 2025 — No extensions will be granted' on country-specific levies. Deputy Treasury Secretary Michael Faulkender on Wednesday indicated that even if tariffs kicked into effect, negotiations could continue beyond the August deadline. 'There's enormous progress that has been made with many of these countries, and for some of them it is just finalizing some of the terms of the framework,' he said in an interview with Bloomberg Television. 'Now obviously, the details of the trade agreement will be worked out well beyond August 1st, but a general framework is the objective to have by August 1st.' Still, the Brazil threat signaled that even if nations strike trade deals with the US by the Aug. 1 deadline, they may still face tariff escalation afterward, according to economists at Barclays Plc. led by Brian Tan. BRICS, Copper 'We suspect President Trump's announcement of a 50% tariff on Brazil is likely to erode Emerging Asian policymakers' confidence that a deal would put an end to uncertainty over US trade policy,' they wrote. The president has also raised the stakes for two key trading partners, saying the European Union could receive a unilateral tariff rate soon despite progress in negotiations, and vowing to hit India with an additional 10% levy for its participation in the BRICS. He has raised the specter of more industry-specific tariffs, as well, floating a 50% rate on copper products that sent that metal climbing as high as 17% in New York on Tuesday, a record one-day spike. He also pitched tariffs as high as 200% on pharmaceutical imports if drug companies don't shift production to the US in the next year. Read More | Trump tariffs aim to settle scores with countries, no matter their size While Trump has touted his tariff notification letters as deals, even the actual agreements he has managed to strike during the negotiating period with the UK and Vietnam have been far short of comprehensive, leaving many details unclear. Trump also secured a truce with China to lower rates and ease the flow of critical earth minerals. The result of Trump's criticism of BRICS economies and his high tariff threats may end up being that it only brings those economies closer together, according to Steven Okun, founder and CEO of APAC Advisors. 'It signals that countries should continue to expect Trump to use tariffs to get what he wants — and there's limited scope for a reprieve,' he said by phone. 'He can add tariffs for whatever reason at any time."
Malaysian Reserve
10-07-2025
- Business
- Malaysian Reserve
Trump unveils new tariff rates, including 50% levy on Brazil
US President Donald Trump unveiled a new round of tariff demand letters on Wednesday, including a 50% rate on Brazil, one of the highest so far announced for the levies which are set to hit in August. Trump cited the treatment of former President Jair Bolsonaro — a right-wing populist leader — in his letter to Brazil, calling on authorities to drop charges against him over an alleged coup attempt. 'This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!' Trump wrote in the letter. Trump on Wednesday also said he would levy a 30% rate on Algeria, Libya, Iraq and Sri Lanka, with 25% duties on products from Brunei and Moldova and a 20% rate on goods from the Philippines. The levies were largely in line with rates Trump had initially announced in April against those countries, though Iraq's duties are down from 39% and Sri Lanka's reduced from 44%. Trump began notifying trading partners of new rates on Monday ahead of a deadline this week for countries to wrap up negotiations with his administration — and posted to social media that he planned to release 'a minimum of 7' letters on Wednesday morning, with additional rates to be posted in the afternoon. Brazil is the first country to receive one of Trump's tariff notifications that was not on the initial list of trading partners when he announced higher so-called reciprocal tariffs in April. And the letter to Brazil also presents a warning shot to the BRICS group of developing nations, which Trump has cast as a threat to the US dollar's status as the world's key currency. The US adding a tariff onto a foreign country to stop a judicial proceeding is unprecedented, according to Stephen Olson, visiting senior fellow, ISEAS – Yusof Ishak Institute and a former US trade negotiator. 'It signals to US trade partners that any and all issues that catch Trump's attention could become a problematic part of the trade agenda,' Olson said. 'It also raises questions as to whether the reciprocal tariff negotiations will ever really settle anything.' Brazil is unusual among Trump's most recent tariff targets because it runs a deficit in trade with the US, while almost all the others post large surpluses. In 2024, Brazil imported some $44 billion of American products, while US imports from Brazil were around $42 billion, according to the Census Bureau. In a social media post late on Wednesday, Brazil's leftist leader Luiz Inacio Lula da Silva said the nation will not be 'tutored' by anyone, adding the case against those who planned a coup is a matter solely for the country's justice system and 'not subject to interference or threat.' 'Any unilateral rate hikes will be responded to using Brazil's economic reciprocity law,' Lula wrote. 'The sovereignty, respect and intransigent defense of the Brazilian people's interests are what guide our relations with the world.' Brazil ranks among the top 20 US trading partners. Out of the other seven countries cited in Trump's announcements Wednesday, only the Philippines — which sent some $14.1 billion of goods to the US last year — makes it into the top 50. Imports from the remaining six nations put together amounted to less than $15 billion last year, with Iraq — an exporter of crude oil — accounting for about half of that sum. Asked what formula he was using to determine the appropriate duty rate for trading partners, Trump told reporters at a White House event on Wednesday that it was 'based on common sense, based on deficits, based on how we've been over the years, and based on raw numbers.' 'They're based on very, very substantial facts, and also past history,' he said. So far, the latest warnings have done little to rattle markets, with traders focusing on Trump's overall extension of the deadline for the so-called reciprocal tariffs to Aug. 1. That's effectively given trading partners an extension for talks and initially fueled skepticism on Wall Street that he would follow through on his import taxes. But the move on Brazil shook the real, which slumped as much as 2.9% against the US dollar, while the $5.35 billion iShares MSCI Brazil ETF — the largest US-listed exchange-traded fund tracking the nation's equities — was down 1.8% in postmarket trading. Trump added to uncertainty earlier this week by claiming he was 'not 100% firm' on that new cut-off date for talks. He has since sought to signal to investors and trading partners that he is committed to carrying out his tariff threats, vowing Tuesday that 'all money will be due and payable starting AUGUST 1, 2025 — No extensions will be granted' on country-specific levies. Deputy Treasury Secretary Michael Faulkender on Wednesday indicated that even if tariffs kicked into effect, negotiations could continue beyond the August deadline. 'There's enormous progress that has been made with many of these countries, and for some of them it is just finalizing some of the terms of the framework,' he said in an interview with Bloomberg Television. 'Now obviously, the details of the trade agreement will be worked out well beyond August 1st, but a general framework is the objective to have by August 1st.' The president has also raised the stakes for two key trading partners, saying the European Union could receive a unilateral tariff rate soon despite progress in negotiations, and vowing to hit India with an additional 10% levy for its participation in the BRICS. And he's raised the specter of more industry-specific tariffs, floating a 50% rate on copper products that sent that metal climbing as high as 17% in New York on Tuesday, a record one-day spike. He also pitched tariffs as high as 200% on pharmaceutical imports if drug companies don't shift production to the US in the next year. The barrage of letters and fresh tariff threats marked the latest turn in a dizzying trade agenda that has spurred volatility in markets and left consumers, businesses and trading partners anxious about the impact on trade flows and the global economy. Trump initially announced the so-called reciprocal tariffs on April 2, but after markets reacted with alarm, paused the higher duties to 10% for a 90-day negotiating period that was set to end on Wednesday, July 9 before the latest three-week extension. Trump's letters on Monday targeted countries including Japan, South Korea, South Africa, Indonesia, Thailand and Cambodia. Most of the tariff rates, however, were largely in line with what Trump had already announced the nations were likely to face. While Trump has touted his tariff notification letters as deals, even the actual agreements he has managed to strike during the negotiating period with the UK and Vietnam have been far short of comprehensive, leaving many details unclear. Trump also secured a truce with China to lower rates and ease the flow of critical earth minerals. –BLOOMBERG
