On this, his first official campaign stop, former President Donald Trump made a pipe dream of reality. He announced a 20% blanket tariff on all imports from aforementioned countries, matching the rate he imposed unilaterally back in April. This decision flies in the face of the most recent aggressive negotiations between the U.S. and a handful of nations. Thailand, Japan and Malaysia round out countries with the most exports to the United States facing high tariffs.
Currently, Thailand is slapped with a massive 36% tariff on all its exports. This rate is actually the 3rd highest of all the 14 nations that Trump picked out. As high as the new tariff rate is, it is unchanged from the level that USTR itself previously set earlier this year. Japan, led by Prime Minister Shigeru Ishiba, is reportedly preparing for an increase in tariffs. Beginning August 1, Japanese imports to the United States will soon be subjected to a 25% tariff. That’s up from the initial projection of 24%.
The implications of these tariffs are more than just statistics. Deborah Elms, head of trade policy at the Hinrich Foundation, remarked on the futility of some countries’ negotiating efforts with the Trump administration, stating, “ASEAN members that worked hard to develop packages received almost all the same treatment as countries that either did not fly to DC or were not invited to meet.” This serves as an important reminder to countries, big and small, on how difficult it is to impact U.S. trade policy.
In response to these developments, Prime Minister Ishiba indicated that Japan may revise its approach depending on how the U.S. addresses its concerns. We’ve still got to talk a little bit,” he said. Further extending the discussions to loiter until August’s deadline is what the Trump administration has specifically requested. “Depending on Japan’s response, the content of the letter could be revised,” Ishiba noted.
Whatever the outcome, Malaysia is sailing through very stormy seas. The country’s overall tariff rate has now increased to 25%, up from the threatened 24% previously mentioned. The Ministry of Investment, Trade and Industry in Malaysia reaffirmed their commitment to engaging with the U.S., emphasizing their desire for a “balanced, mutually beneficial, and comprehensive trade agreement.”
All South Africa’s trade officials feel duty bound to up the diplomatic efforts. Their goal is to develop a fairer and more reciprocal trade partnership with the U.S. Cyril Ramaphosa, South Africa’s President, described Trump’s tariffs as “not an accurate representation of available trade data,” indicating his country’s concerns about the impact of these measures.
South Korea’s trade minister, Yeo Han-Koo, has called on the U.S. to lift tariffs on its automobiles and steel. His call is a direct reflection of the increasing frustration felt by countries who have been affected by the new tariff regime.
Donald Trump’s announcement was quickly picked up by the social media landscape. He then published screenshots of those letters that showed the new tariff levels all 15+ countries had been affected by. These letters indicate that there is still time to push for a compromise before the renewed deadline of August 1. Yet unsurprisingly, many countries have lost faith in their ability to change the outcome through their influence.
Countries are rushing to determine the consequences of these tariffs. Look for diplomatic talks to heat up in the weeks before the fiscal cliff.