The U.S. tariff landscape is ever-shifting. Newly inaugurated President Donald Trump is aggressively pursuing a number of trade penalties against a number of countries, claiming economic and political threats. Most recently, the administration announced new tariffs directed at countries like Brazil and India, while at the same time negotiating new trade frameworks with other countries.
In a largely unprecedented step, President Trump then granted the Brazilian government’s policies an economic emergency exemption from the usual requirements for retaliation. In response, the Trump administration slapped new tariffs on Brazilian exports. This announcement follows on the heels of a nationwide “reciprocal” tariffs strategy against the administration’s key trading partners. This strategy has led to the most elevated levies ever in numerous nations. For instance, India is currently under a 25% tariff ceiling, in large part as a result of Indian purchases of Russian oil. India has a bit of breathing space before the complete rate is implemented.
At the same time, the U.S. and China continue to make progress on de-escalating trade hostilities. In May, the two countries signed a peace deal to reduce tariffs, with the truce slated to hold until August 12. China continues to be subject to high tariffs that go up to 30%. At the same time, U.S. goods face taxes of up to 35%. These historically high tariff rates marked a dramatic shift in international trade, leading to increasing calls to roll back these rates.
Along with Brazil and India, Mexico is in a dangerous spot. President Trump just suspended a decision to raise tariffs on Mexican products to allow these negotiations to continue. This decision is a sign of the administration’s ongoing struggle to balance what are often contradictory trade relations with the U.S.’s North American neighbor’s.
In a deviation from this practice, the U.S. administration has imposed a blanket 10% tariff on every country. This decision will have far-reaching economic consequences. The U.K., European Union, Japan, South Korea, Vietnam, the Philippines, and Indonesia have successfully negotiated trade frameworks that mitigate some of these tariffs. All hope is not lost as Switzerland continues to negotiate a final deal focused on reducing Switzerland’s tariff rates.
As far as preparing the ground for a tariff war goes, President Trump got himself very excited about money collected by these tariffs.
“IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!” – President Donald Trump
This language certainly highlights the administration’s intent to use tariffs as a way to increase U.S. revenues but refers to the need to protect American interests overseas.