Bangkok | President Donald Trump's new tariff rates on US imports from dozens of countries took effect Thursday, the latest chapter in the saga of Trump's reshaping of global trade. But many questions remain.
Trump has threatened tariffs of up to 200 per cent on imports of pharmaceuticals and has ordered a 100 per cent import tax on computer chips. Most US imports of copper, steel and aluminum are subject to a 50 per cent tariff.
There's still no agreement on what tariffs might apply to products shipped from China. India has no deal yet and faces a potential 50 per cent tariff as Trump pressures it to stop buying oil from Russia.
Recent data shows uncertainty is clouding the outlook for exporters around the world as a rush to beat the tariffs during a pause for negotiation tapers off. Companies are reporting billions of dollars in higher costs or losses due to the higher import duties.
Global financial markets took Thursday's tariff adjustments in stride, with Asian shares and US futures mostly higher.
Here's where things stand in what has proven to be a fast-changing policy landscape.
The tariffs taking effect this week
The tariffs announced on August 1 apply to 66 countries, Taiwan and the Falkland Islands. They are a revised version of what Trump called " reciprocal tariffs," announced on April 2: import taxes of up to 50 per cent on goods from countries that have a trade surplus with the United States, along with 10 per cent “baseline' taxes on almost everyone else. That move triggered sell-offs in financial markets and Trump backtracked to allow time for trade talks.
The president has bypassed Congress, which has authority over taxes, by invoking a 1977 law to declare the trade deficit a national emergency. That's being challenged in court, but the revised tariffs still took effect.
To keep their access to the huge American market, major trading partners have struck deals with Trump. The United Kingdom agreed to 10 per cent tariffs and the European Union, South Korea and Japan accepted US tariffs of 15 per cent.
Those are much higher than the low single-digit rates they paid last year, but down from the 30 per cent Trump had ordered for the EU and the 25 per cent he ordered for Japan.
Countries in Africa and Asia are mostly facing lower rates than the ones Trump decreed in April. Thailand, Pakistan, South Korea, Vietnam, Indonesia and the Philippines cut deals with Trump, settling for rates of around 20 per cent.
Indonesia views its 19 per cent tariff deal as a leg up against exporters in other countries that will have to pay slightly more, said Fithra Faisal Hastiadi, a spokesperson in the Indonesian president's office.
“We were competing against Vietnam, India, Bangladesh, Sri Lanka and China ... and they are all subject to higher reciprocal tariffs,” Hastiadi said. “We believe we will stay competitive.”
The latest situation for China and India Trump has yet to announce whether he will extend an August 12 deadline for reaching a trade agreement with China that would forestall earlier threats of tariffs of up to 245 per cent.
Treasury Secretary Scott Bessent said the president is deciding about another 90-day delay to allow time to work out details of an agreement setting tariffs on most products at 50 per cent, including extra import duties related to illicit trade in fentanyl.
Higher import taxes on small parcels from China have hurt smaller factories and layoffs have accelerated, leaving some 200 million workers reliant on “flexible work” — the gig economy — for their livelihoods, the government estimates.
India also has no broad trade agreement with Trump. On Wednesday, Trump signed an executive order placing an extra 25 per cent tariff for its purchases of Russian oil, bringing combined US tariffs to 50 per cent.
India's Foreign Ministry has stood firm, saying it began importing oil from Russia because traditional supplies were diverted to Europe after the outbreak of the Ukraine conflict, a “necessity compelled by the global market situation.”
The hardest-hit countries
Struggling, impoverished Laos and war-torn Myanmar and Syria face 40-41 per cent rates.
Trump whacked Brazil with a 50 per cent import tax largely because he's unhappy with its treatment of former Brazilian President Jair Bolsonaro.
South Africa said the steep 30 per cent rate Trump has ordered on the exporter of precious gems and metals has put 30,000 jobs at risk and left the country scrambling to find new markets outside the United States.
Even wealthy Switzerland is under the gun. Swiss officials were visiting Washington this week to try to stave off a whopping 39 per cent tariff on US imports of its chocolate, watches and other products. The rate is over 2 1/2 times the 15 per cent rate on European Union goods exported to the United States.
Canada and Mexico have their own arrangements Goods that comply with the 2020 United States-Mexico-Canada Agreement that Trump negotiated during his first term are excluded from the tariffs.
Even though US neighbour and ally Canada was hit by a 35 per cent tariff after it defied Trump, a staunch supporter of Israeli Prime Minister Benjamin Netanyahu, by saying it would recognise a Palestinian state, nearly all of its exports to the US remain duty free.
Canada's central bank says 100 per cent of energy exports and 95 per cent of other exports are compliant with the agreement since regional rules mean Canadian and Mexico companies can claim preferential treatment.
The slice of Mexican exports not covered by the USMCA is subject to a 25 per cent tariff, down from an earlier rate of 30 per cent, during a 90-day negotiating period that began last week.
The outlook for businesses
Surveys of factory managers offer monthly insights into export orders, hiring and other indicators of how businesses are faring. The latest figures in the United States and globally mostly showed conditions deteriorating.
In Japan, factory output contracted in July, purchasing activity fell and hiring slowed, according to the S&P Global Manufacturing PMI. But the data were collected before Trump announced a trade deal that cut tariffs on Japanese exports to 15 per cent from 25 per cent.
Similar surveys show a deterioration in manufacturing conditions worldwide, as a boost from “front loading” export orders to beat higher tariffs faded, S&P Global said. Similar measures for service industries have remained stronger, reflecting more domestic business activity. In Asia, that includes a rebound in tourism across the region.
Corporate bottom lines are also taking a hit. Honda Motor said Wednesday that it estimates the cost from higher tariffs at about USD 3 billion.
On top that, the US economy — Trump's trump card as the world's biggest market — is starting to show pain from months of tariff threats
