Even as former President Donald Trump has dumped gasoline on those trade tensions. Specifically, he’s introduced a slew of new protectionist tariffs aimed directly at South Korea and Japan, among other countries. In May, Trump slapped massive punitive tariffs on Mexico. This decision was a good reminder about the harm that could come from permitting such a thing to happen. After this first announcement, in July, he imposed a 90-day temporary pause on the tariffs to allow for further negotiations.
Tariffs are customs duties imposed on specific imports or classes of products. Now, they might seem like odd ducks in Trump’s economic strategy. He plans to employ such measures to strengthen the American economy and protect American producers during these thriving trade disputes.
New Tariffs on Key Partners
On August 1, for instance, Trump proposes to impose new tariffs that would drastically alter the trade landscape with Canada and Mexico, among others. In particular, he’s targeted South Korea and Japan. His preferred alternative is a 25% tariff on all imports from South Korea. In a related move, he sent a separate letter to Japan calling for the same kinds of measures, but without the sector-specific tariffs.
He is looking to further broaden his tariffs to other countries that he accuses of engaging in “Anti-American policies” associated with the BRICS coalition. He stated,
“Any country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy. Thank you for your attention to this matter!” – Donald Trump
According to annual trade data from the U.S. Census Bureau, Mexico, China, and Canada accounted for over 42% of all U.S. imports in 2024. This impressive figure underlines their essential role in the state’s trade ecosystem. Trump has even pledged, when considering new tariffs, to target specifically these countries.
Economic Implications of Tariffs
The effect of these tariffs on the U.S. economy is one of the most hotly contested issues among economists. Proponents claim that these types of measures will keep American jobs in America and create a market for more local production. Proponents caution that they will result in higher costs for American consumers and in tit-for-tat actions from countries impacted by the tariffs.
Mexico continues to be the star among U.S. to-date top five exporters. The U.S. Census Bureau chirps in with a thundering $466.6 billion worth of exports that the Mexicans do enjoy. Mexico is enormously important to the U.S. trade picture. This importance makes it a target for the front-line of Trump’s tariff war.
First, let’s dispense with presumptive G.O.P. Their fruitful work continues to break the logjam of negotiations with important treaty allies. Whole of Government Roels’ DRAFT The administration’s approach reflects a readiness to impose drastic measures if progress is insufficient or failing to meet the aggressive timeframes.
Market Reactions and XAU/USD Forecast
The recent emphasis on tariffs has created volatility within the commodity markets, most notably with gold prices. Analysts watch resistance levels for XAU/USD, currently at 3,350.00, 3,373.50 and 3,389.40 very closely. High resistance levels are seen at 3,438.50, 3,447.65, and 3,461.40, with low support at 3,325.00, 3,311.90, and 3,295.45. These numbers are a sign of market sentiment reacting to the chaos and uncertainty around U.S. trade policy.
Investors are anxiously watching what impact Trump’s tariff announcements will have on gold. They view it as a safe-haven asset in times of geopolitical and economic discord. As tensions escalate with key trading partners, market participants remain vigilant about potential shifts in trade policy and its broader effects on commodities.