Latest news with #import tariffs
BBC News
3 hours ago
- Business
- BBC News
Trump's global tariffs 'victory' may come at a high price
In April Donald Trump stunned the world by announcing sweeping new import tariffs – only to put most on hold amid the resulting global financial months later, the US president is touting what he claims are a series of victories, having unveiled a handful of deals with trading partners and unilaterally imposed tariffs on others, all without the kind of massive disruptions to the financial markets that his spring attempt least, so worked to reorder America's place in the global economy, Trump is now promising that the US will reap the benefits of new revenue, rekindle domestic manufacturing, and generate hundreds of billions of dollars in foreign investment and that turns out to be the case – and whether these actions will have negative consequences – is still very much in is clear so far, however, is that a tide that was (gently) turning on free trade, even ahead of Trump's second term, has become a wave crashing across the globe. And while it is reshaping the economic landscape, it hasn't left the kind of wreckage in its wake that some might have predicted - though of course there is often a lag before impact is fully seen. What's more, for many countries, this has all served as a wake up call - a need to remain alive to fresh so, whilst the short term result might be - as Trump sees it - a victory, the impact on his overarching goals is far less certain. As are the long-term repercussions, which could well pan out rather differently for Trump - or the America he leaves behind after his current term. The '90 deals in 90 days' deadline For all the wrong reasons, 1 August had been ringed on international policymakers' calendars. Agree new trading terms with the US by then, they'd been warned – or face potentially ruinous White House trade adviser Peter Navarro predicted "90 deals in 90 days" and Trump offered an optimistic outlook on reaching agreements, the deadline always appeared to be a tall order. And it the time the end of July rolled around, Trump had only announced about a dozen trade deals – some no more than a page or two long, without the kind of detailed provisions standard in past negotiations. The UK was first off the blocks, perhaps inevitably. Trump's biggest bugbear is, after all, America's trade deficit, and trade is in broad balance when it comes to the the baseline 10% applied to most British goods may initially have raised eyebrows, it provided a hint of what was to follow – and in the end came as a relief compared to the 15% rate applied to other trading partners such as the EU and Japan, with whom the US has larger deficits; $240bn and $70bn respectively last year even those agreements came with strings attached. Those countries that weren't able to commit to, say, buying more American goods, often faced higher Korea, Cambodia, Pakistan - as the list grew, and tariff letters were fired off elsewhere, the bulk of American imports are now covered by either an agreement or a presidential decree concluded with a curt "thank you for your attention to this matter". Capacity to 'damage' the global economy Much has been revealed as a result of the good news. The wrangling of the last few months means the most painful of tariffs, and recession warnings, have been dodged. The worst fears – in terms of tariff levels and potential economic fallout (for the US and elsewhere) - have not been realised. Second, the agreement of tariff terms, however unpalatable, reduced much of the uncertainty (itself wielded by Trump as a powerful economic weapon) for better - and for better, in the sense that businesses are able to make plans, investment and hiring decisions that had been paused may now be resumed. Most exporters know what size tariffs their goods face – and can figure out how to accommodate or pass on the cost to growing sense of certainty underpins a more relaxed mood in financial markets, with shares in the US notably gaining. But it's for the worse, in the sense that the typical tariff for selling into the US is higher than before – and more extreme than analysts predicted just six months may have hailed the size of the agreement of the US with the EU – but these are not the tariff-busting deals we equated with tearing down trade barriers in previous greatest fears, the warnings of potential disaster, have receded. But Ben May, Director of global macro forecasting at Oxford Economics, says that US tariffs had the capacity to "damage" the global economy in several ways."They are obviously raising prices in the US and squeezing household incomes," he says, adding that the policies would also reduce demand around the world if the world's largest economy ends up importing fewer goods. Winners and losers: Germany, India and China It's not just about the size of tariff, but the scale of trading relationship with the US. So while India potentially faces tariffs of over 25% on its exports to the US, economists at Capital Economics reckon that, with US demand accounting for just 2% of that nation's gross domestic product, the immediate impact on growth could be news is not so good for Germany, though, where the 15% tariffs could knock more than half a percentage point off growth this year, compared to what was expected earlier in the due to the size of its automotive sector - unhelpful for an economy that may be teetering on the brink of recession. Meanwhile, India became the top source of smartphones sold in the US in the last few months, after fears of what may lie in store for China prompted Apple to shift the other hand, India will be mindful that the likes of Vietnam and the Philippines – which face lower tariffs when selling to the US – may become relatively more attractive suppliers in other the board, however, there's relief that the blow, at least, is likely to be less extensive than might have been. But what has been decided already points to longer-term ramifications for global trading patterns and alliances the element of jeopardy introduced into a long-established major relationship with the US, lent added momentum to the UK's pursuit of closer ties with the EU – and getting a trade deal with India over the many countries, this has served as a wake up call - a need to remain alive to fresh alliances. A very real political threat for Trump? As details are nailed down, the implications for the US economy become clearer in the late spring there actually benefitted from a flurry of export sales, as businesses rushed to beat any higher tariffs imposed on American goods. Economists expect that growth to lose momentum over the rest of the year. Tariffs that have increased from an average of 2% at the beginning of the year to around 17% now have had a notable impact on US government revenue – one of the stated goals of Trump's trade policy. Import duties have brought in more than $100bn so far this year - about 5% of US federal revenue, compared to around 2% in past years. Treasury Secretary Scott Bessent said he expected tariff revenue this year to total about $300bn. By comparison, federal income taxes bring in around $2.5tn a shoppers remain in the front line, and have yet to see higher prices passed on in full. But as consumer goods giants such as Unilever and Adidas start to put numbers on the cost increases involved, some sticker shock, price rises, loom – potentially enough to delay Trump's desired rate cut – and possibly a dent to consumer spending. Forecasts are always uncertain, of course, but this represents a very real political threat for a president who promised to lower consumer prices, not take actions that would raise and other White House officials have floated the idea of providing rebate checks to lower-income Americans – the kinds of blue-collar voters who have fuelled the president's political success – that would offset some of the pocketbook an effort could be unwieldy, and it would require congressional also a tacit acknowledgment that simply boasting of new federal revenue to offset current spending and tax cuts, and holding out the prospect of future domestic job and wealth creation is politically perilous for a Republican party that will have to face voters in next year's midterm state and congressional midterm elections. The deals yet to be hammered out Complicating all this is the fact that there are many countries where a deal is yet to be hammered out – most notably Canada and Taiwan. The US administration has yet to pronounce its decisions for the pharmaceuticals and steel industry. The colossal issue of China, subject to a different deadline, remains agreed to a negotiating extension with Mexico, another major US trading partner, on Thursday of the deals that have been struck have been verbal, as yet unsigned. Moreover it is uncertain if and how the strings attached to Trump's agreements – more money to be spent purchasing American energy or invested in America – will actually be delivered some cases, foreign leaders have denied the existence of provisions touted by the president. When it comes to assessing tariff agreements between the White House and various countries, says Mr May, the "devil is in the detail" – and the details are clear, however, that the world has shifted back from the brink of a ruinous trade war. Now, as nations grapple with a new set of trade barriers, Trump aims to call the history tells us that his overarching aim - to return production and jobs to America – may meet with very limited success. And America's long-time trading partners, like Canada and the EU, could start looking to form economic and political connections that bypass what they no longer view as a reliable economic may be benefitting from the leverage afforded by America's unique position at the centre of a global trading order that it spent more than half a century establishing. If the current tariffs trigger a foundational realignment, however, the results may not ultimately break in favour of the questions will be answered over years, not weeks or months. In the meantime, Trump's own voters may still have to pick up the tab – through higher prices, less choice and slower reporting: Michael Race. Top image credit: Getty Images BBC InDepth is the home on the website and app for the best analysis, with fresh perspectives that challenge assumptions and deep reporting on the biggest issues of the day. And we showcase thought-provoking content from across BBC Sounds and iPlayer too. You can send us your feedback on the InDepth section by clicking on the button below.
Yahoo
8 hours ago
- Business
- Yahoo
Global trade in photos as a new deadline approaches on Trump tariffs
While discussions with trading partners continue and a revamp of U.S. trade policy faces legal hurdles in federal court, U.S. President Donald Trump is approaching his deadline of Friday, Aug. 1, for implementing higher import tariffs on products from across the world. ___ This is a photo gallery curated by AP photo editors. Sign in to access your portfolio
The Independent
15 hours ago
- Business
- The Independent
South Korea hails last-minute deal with Trump to reduce US tariff to 15%
President Lee Jae Myung said South Korea had 'overcome a major hurdle' by striking a trade deal with the US to cut import tariffs to 15 per cent, easing tensions with its chief ally. The deal, announced by Donald Trump, came after South Korean officials met with the US president on Wednesday, sparing one of the world's biggest exporters from a 25 per cent tariff just a day before sweeping American levies on other countries were set to take effect. South Korea is a powerhouse exporter of computer chips, cars and steel. The agreement paved the way for Mr Lee's summit with Mr Trump in the next two weeks. It would be the recently elected South Korean president's first meeting with his American counterpart since taking office. 'We've overcome a major hurdle,' Mr Lee said after the deal was done. 'This agreement is the result of the convergence of the US interest in rebuilding its manufacturing industry and our commitment to enhancing the competitiveness of Korean companies in the US market.' Announcing the deal, Mr Trump said they had agreed to a tariff of 15 per cent for South Korea. 'America will not be charged a tariff,' he added. South Korea, one of America's closest military allies, was racing to reach a deal in what was seen as an early test for Mr Lee, who took office in June after a snap election. Mr Trump said the deal had eliminated uncertainty in the export environment and set US tariffs lower than or at the same level as major competitors. Analysts hailed the agreement for avoiding the worst-case scenario for South Korea as pressure had been rising on Seoul after Japan, a key competitor in the car and manufacturing industries, secured a 15 per cent US tariff rate. Mr Trump had also threatened to withdraw American troops from South Korea after saying the country should pay for its own defence, calling it 'very unfair' because it was 'making a lot of money'. South Korea's economy is heavily dependent on exports of goods and services, accounting for 44 per cent of its economic output in 2023, double the rate of fellow export-driven economy Japan. In 2024, the East Asian nation recorded a $66bn trade surplus with the US. South Korea agreed under the deal to invest $350bn in the US in projects selected by Mr Trump and to purchase $100bn in energy products. South Korea would accept American products, including autos and agriculture, into its markets and impose no import duties on them, Mr Trump said. 'Our initial take is that it is a case of the worst avoided, with a pinch of relief removing Korea-specific tariff risks,' said Kathleen Oh, chief Korea economist at Morgan Stanley. "We also see this as broadly positive, as it puts Korea on level ground with its export competitors in the US, especially for autos.' South Korean officials claimed that the deal would maintain a 15 per cent tariff cut on cars – a key sticking point – and avoid expanding US access to its beef and rice markets. Mr Trump, however, suggested agriculture was included, without offering specific details. Market access for farm products has long been politically sensitive in South Korea, sparking mass protests in 2008 and risking the new government's support among key voters. "We avoided the worst and chose the next best," former South Korean trade minister Cheong In Kyo said, adding that much would depend on how investments to the US were structured. 'Depending on how and where $350 billion will be spent, this fund will be looked at differently.' Kim Yong Beom, policy chief for the South Korean presidential office, said that $150bn of the $350bn fund was aimed at a shipbuilding partnership while the rest would cover chips, nuclear power, batteries, and biotechnology. The energy purchases would include LNG, LPG, crude oil, and some coal, Mr Kim added. "This is within our usual import volume," he said, adding that it could lead to a "slight shift" in the country's mix of imports from the Middle East to more American sources. Mr Trump, meanwhile, intensified his rhetoric against countries still struggling to strike a deal with American negotiators ahead of the 1 August deadline for his tariffs to take effect. While South Korea was able to match Japan's deal for a baseline tariff of 15 per cent, Indonesia and the Philippines agreed to a 19 per cent rate each. and even threatening a trade war.
News24
16 hours ago
- Business
- News24
Tau says SA may make last-minute bid, Lamola in US to smooth relations
Minister of Trade, Industry and Competition Parks Tau said SA may submit a new last-minute offer to the US – with pork a major sticking point. During a radio interview with 702, Tau confirmed that the head of the Department of International Relations and Cooperation (Dirco) Robert Lamola has been in Washington this week to engage with the US on their other objections against SA. This includes 'geopolitical' matters. Earlier this week, Zane Dangor, director-general of Dirco, confirmed that the US has included their concerns about black economic empowerment (BEE) in trade negotiations. From Friday, South African exporters of many products to the US will face import tariffs of 30% (from 10%) in the absence of a new agreement. Only 22 countries have certainty about their new tariffs from 1 August. 'We actually spoke to the US last night, both at the level of the embassy and also at the level of the US Trade Representative. And they indicated that even they are unable to confirm what the announcement [on South Africa's tariffs] would be - and they would encourage us to resubmit our proposal, possibly an enhanced proposal to the United States government, it would be processed by the White House.' The US rejected South Africa's first offer in May. This was followed by a sweetened offer in June. Since then, there has been very little feedback from the Americans. Tau said that the South Africans are now 'having to navigate a last-minute proposal that's enhanced from the proposal that we had initially given'. One of the issues that was discussed with the US on Wednesday night was related to US pork imports. SA has longstanding restrictions on imports of pork from the US, due to the prevalence of Porcine Reproductive and Respiratory Syndrome in that country. On the issue of BEE and other non-trade demands, Tau said that Minister Lamola has been in Washington this week to engage on these 'geopolitical matters.' He said: My opinion is that we have pulled out all stops, including sending delegations from ministries, including sending officials into the US government. We've engaged through business, through civil society. Our colleagues in Cosatu were there in the past week. There have been various business delegations. So, from all angles we have continued to engage with the US. In the worst-case scenario, government is working on a package of support mechanisms for companies affected by the surge in US import tariffs. The Department of Trade Industry and Competition said this week that the response package would include 'demand-side interventions' for impacted industries. This might include potential tax incentives or opening up new markets, Business Day reported. Tau said a lot of work has been done to find out which companies will be affected. He said some industries might still be able to sell to the US market at much higher tariffs, 'But there are industries or companies that simply would not be able to access the market, then we might have to bring in a tariff support mechanism.' His department has established an export support desk that will be launched on Friday.
CNA
a day ago
- Automotive
- CNA
Toyota supplier Denso posts 11% fall in first-quarter profit
TOKYO :Japan's Denso, a leading auto parts supplier to Toyota, posted an 11 per cent decline in first-quarter operating profit on Friday, hit by U.S. import tariffs and a stronger yen. Operating profit for the three months to the end of June totalled 107.2 billion yen ($719.85 million), versus 130.0 billion yen in an average of estimates by seven analysts surveyed by LSEG. A year earlier, the company had posted an operating profit of 120.6 billion yen. Denso maintained its 675-billion-yen operating profit forecast for the fiscal year ending March 2026. ($1 = 148.9200 yen)
