Latest news with #tradeimbalance
Al Jazeera
11 minutes ago
- Business
- Al Jazeera
Trump hits India with 25% tariff, extra ‘penalty' for Russian oil purchases
United States President Donald Trump has announced a 25 percent tariff on Indian goods, as well as an unspecified penalty for the country's purchase of Russian oil and military equipment, as the unending war in Ukraine frustrates the White House. Trump announced the trade moves – which he said will come into effect on Friday – on his Truth Social account on Wednesday, saying they are necessary to reverse a long-running trade imbalance. 'While India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high,' Trump wrote. The president also blamed India for buying military equipment and oil from Russia, which he said has enabled the war in Ukraine. As a result, he intends to charge an additional 'penalty' starting on Friday as part of the launch of his administration's revised tariffs on multiple countries. The aggressive trade policy further complicates ties between Trump and India's Prime Minister Narendra Modi, which were warm during the US president's first term but have since faced challenges over trade and immigration. Modi has also denied Trump's claims that he intervened to resolve a four-day conflict with Pakistan in May, saying India has not and will never 'accept mediation'. Pakistan, by contrast, has seen its stock rise with the Trump administration before and after the conflict with India. In June, Trump hosted Pakistan's army chief, Asim Munir, for lunch at the White House – the first time a US president has hosted a military chief from Pakistan who isn't also the country's head of state. The US announcement also follows a slew of negotiated trade frameworks with the European Union, Japan, the Philippines and Indonesia – all of which Trump said would open markets for US goods while enabling the US to raise tax rates on imports. Trump views tariff revenues as a way to help offset the budget deficit increases tied to his recent income tax cuts and generate more domestic factory jobs. While Trump has effectively wielded tariffs as a cudgel to reset the terms of trade, the economic impact is uncertain, as most economists expect a slowdown in US growth and greater inflationary pressures as the costs of the taxes are passed along to domestic businesses and consumers. The Census Bureau reported that the US ran a $45.8bn trade imbalance in goods with India last year, meaning it imported more than it exported. With a population exceeding 1.4 billion people, India is the world's largest country and a possible geopolitical counterbalance to China. India and Russia have close relations, and New Delhi has not supported Western sanctions on Moscow over its war in Ukraine. When Trump in February met with Modi, the US president said that India would start buying US oil and natural gas. Trump discussed his policies on trade and tariffs with reporters accompanying him on Tuesday on the flight home following a five-day visit to Scotland. He declined to comment when asked about reports that India was bracing for a US tariff rate of at least 25 percent, saying, 'We're going to see.' Trump also said the outlines of a trade agreement with India had not yet been finalised.
Al Jazeera
09-07-2025
- Business
- Al Jazeera
Trump announces new tariffs on six countries including Iraq and the Philippines
US President Donald Trump has issued a new round of tariff letters to six countries, including Algeria, Brunei, Iraq, Libya, Moldova and the Philippines. The letters, which were sent on Wednesday, call for tariffs of 30 percent on Algeria and Iraq; 25 percent on Brunei, Libya and Moldova; 20 percent on the Philippines – the largest of the trading partners announced on Wednesday. The tariffs are expected to start on August 1. Trump posted the letters on Truth Social after the expiration of a 90-day negotiating period that began with a baseline levy of 10 percent. Trump is giving countries more time to negotiate before his August 1 deadline, but he has insisted there will be no extensions for the countries that receive letters. The Census Bureau reported that last year, the US ran a trade imbalance on goods of $1.4bn with Algeria, $5.9bn with Iraq, $900m with Libya, $4.9bn with the Philippines, $111m with Brunei and $85m with Moldova. The imbalance represents the difference between what the US exported to those countries and what it imported. None of the countries listed are major industrial rivals to the United States. Taken together, the trade imbalances with those six countries are essentially a rounding error in a US economy with a gross domestic product (GDP) of $30 trillion. Wednesday's letters are the latest in a slate the Trump Administration sent to nations around the globe. On Monday, he threatened Japan and South Korea with 25 percent tariffs, stepping up pressure on the two historical US allies and a dozen other economies to reach trade deals with Washington. Over the weekend, the Trump administration began sending letters to countries informing them that the US would begin to reimpose the tariffs it postponed in April. Trump's erratic approach to tariffs is triggering widespread economic effects on the US and countries around the world. In the US, the most recent jobs report showed little to no growth in sectors including trade and construction, industries largely impacted by tariffs. The US GDP contracted 0.5 percent in the first quarter of the year, according to data released by the US Department of Commerce's report last month. This comes amid a handful of looming trade negotiations across the globe that will impact the US economy and many of its key trade partners. The Trump administration has only put forth two trade agreements thus far, which are with the United Kingdom and Vietnam. US markets have stayed stable despite the new tariffs. As of 12:30pm Eastern Time (16:30 GMT), the Nasdaq is up 0.5 percent. The S&P 500 is about even with the market open, only up about 0.2 percent, and the Dow Jones Industrial Average is up by 0.1 percent.
Mail & Guardian
09-07-2025
- Business
- Mail & Guardian
US tariffs on local exports could slash growth, economists warn
US President Donald Trump said this week that the tariff is meant to address the trade imbalance between South Africa and the US. (Photo: Evan Vucci/AP/picture alliance) Economists have said that South Africa's South Africa is one of 14 countries that have received formal communication from the US regarding proposed tariff increases. Trump first announced the tariffs in In his latest communication to South Africa, Trump said: 'Our relationship has been, unfortunately, far from reciprocal. Starting on August 1, 2025, we will charge South Africa a tariff of only 30% on any and all South African products sent to the United States, separate from all sectoral tariffs.' The South African government said the 30% tariff is based on a particular interpretation of the balance of trade between South Africa and the US, and it would try to negotiate better terms with Washington. 'This contested interpretation forms part of the issues under consideration by the negotiating teams from South Africa and the United States. Accordingly, South Africa maintains that the 30% reciprocal tariff is not an accurate representation of available trade data,' Vincent Magwenya, the presidency spokesperson, said in a statement. 'In our interpretation of the available trade data, the average tariff on imported goods entering South Africa stands at 7.6%. Importantly, 56% of goods enter South Africa at 0% most favoured nation tariff, with 77% of US goods entering the South African market under the 0% duty. South Africa's single biggest exports to the US are mining ores and metals, followed by machinery and transport equipment and vehicles. George Herman, the chief investment officer at Citadel, said that although the full details of how the new tariffs are going to be imposed or where exemptions are going to be applied were not made public,'the automotive, wine and South Africa's Standard Bank had expected the economy to grow by nearly 2% this year, but problems ranging from the initial tariff hikes and the associated policy uncertainty to weather disruptions such as floods and struggles earlier this year in passing the budget have seen it trim this to just more than 1%, said Elna Moolman, the bank's head of macroeconomic research. 'Should the 30% tariff hikes on South African exports to the United States be implemented, even 1% would be hard to reach and it could, depending on the extent of any exemptions, even negate the growth improvement that is widely expected from last year's weak growth,' she said. Based on rough estimates from existing export volumes to the US, a reduction in trade could cut South Africa's GDP growth by up to 0.5%, Citadel's Herman said. 'With the economy already forecast to grow by only about 1% this year, this would represent a significant blow. 'From a financial market perspective, risk premiums have largely been priced out, as investors anticipate that interest rate cuts will help cushion the impact. However, this optimism may be misplaced,' he said. 'Persistent economic headwinds and the compounding effect of elevated tariffs could dampen global growth and create a more difficult environment in the months ahead.' Presidency spokesperson Magwenya said: 'South Africa will continue with its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States. We welcome the commitment by the US government that the 30% tariff is subject to modification at the back of the conclusion of our negotiations with the United States.' President Cyril Ramaphosa has called on government trade negotiations teams and South African companies to diversify trade relations to promote better resilience in both global supply chains and the local economy. But economists say more reforms are needed to boost the economy, including policy intervention. 'In our view, while 2025 growth will be weaker than originally envisaged owing to a range of headwinds, including US tariffs on SA and other countries' exports, trend growth should ultimately still improve if policy reforms continue,' Standard Bank's Moolman said.
Zawya
09-07-2025
- Business
- Zawya
South Africa says Trump relying on ‘contested' data to raise tariffs
South Africa says the US is using 'contested' data on trade to raise tariffs Pretoria argues will unfairly punish the country. In response to President Donald Trump's decision to re-impose higher taxes on South African exports, President Cyril Ramaphosa's office said the two sides must sit down to assess actual data on trade to avoid misinterpreting facts. Trump announced on Monday that he will impose a new 30 percent tariff on imports from South Africa, to take effect on August 1. Trump argued that the trade imbalance favours South Africa because it imposes tariffs on US goods while enjoying privileges under the expiring Africa Growth Opportunity Act (Agoa). 'This 30 percent tariff is based on a particular interpretation of the balance of trade between South Africa and the United States. This contested interpretation forms part of the issues under consideration by the negotiating teams from South Africa and the United States,' said Ramaphosa's spokesperson, Vincent Magwenya.'Accordingly, South Africa maintains that the 30 percent reciprocal tariff is not an accurate representation of available trade data. According to our interpretation of the available trade data, the average tariff on imported goods entering South Africa is 7.6 percent.'In a letter addressed to President Ramaphosa, Trump said: 'We have had years to discuss our trading relationship with South Africa, and have concluded that we must move away from these long-term, and very persistent, trade deficits engendered by South Africa's tariff, and non-tariff, policies and trade barriers.'Our relationship has been, unfortunately, far from reciprocal. Starting on August 1, 2025, we will charge South Africa a tariff of only 30 percent on any and all South African products sent to the United States, separate from all sectoral tariffs.'South Africa, however, argues, 56 percent of goods enter South Africa at zero percent most favoured nation tariff, with 77 percent of US goods entering the South African market under the zero percent duty. Under the World Trade Organisation rules, countries are encouraged to treat trading partners the same way when it comes to trading on common items. The presidency in Pretoria clarified that South Africa remains committed to fostering closer trade relations with the United States in their ongoing negotiations. This deal addresses issues raised by the US, including South Africa's alleged trade surplus, unfair trade practices, and lack of reciprocity.'South Africa will continue with its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States. We welcome the commitment by the US government that the 30 percent tariff is subject to modification at the back of the conclusion of our negotiations with the United States,' said Mr Magwenya. Meanwhile, President Trump stated that if South Africa were to implement higher tariffs in response to his announcement, the additional tariffs would be added on top of the existing 30 percent. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Washington Post
08-07-2025
- Business
- Washington Post
The Latest: Trump delays tariff implementation another month
President Donald Trump 's latest executive order delaying official tariff increases on dozens of countries until Aug. 1 has relieved some pressure on world markets , but he also ordered a 25% tax on goods imported from Japan and South Korea , citing persistent trade imbalances with the two crucial U.S. allies in Asia.
