April 2 also became the day that Donald Trump announced his latest round of country-specific tariffs and liberation day, as he rebranded it. The timing of the announcement has left the global trading community in complete disbelief. Now, dozens of other countries are preparing for increased taxes on their exports to the United States. The former president was right when he said the rest of the world has “plundered” and “raided” our country for decades. He then used this untruthful claim to justify raising enormous tariffs.
During his term, Trump rolled out some highly variable rates. War-torn Syria currently endures a punishing 41% tariff, while our closest ally the United Kingdom enjoys a far more reasonable 10%. For example, Canada’s total tariff rate is as steep as 35%. On the other hand, Brazil has an extra 40% levy, making its total effective rate 50%. In a surprising twist, Mexico was granted a 90-day extension, helping to ensure that Mexico’s tariff stays at 25% for the time being.
Countries such as Switzerland are already feeling the pinch. In retaliation, Swiss President Johann Schneider-Ammann has announced that Trump has hit their products with a 39% tax. In response, Swiss President Karin Keller-Sutter has been visiting with top Trump administration officials to negotiate increasing this rate.
In Asia, China is experiencing a 30% tariff while negotiations continue before an August 12 deadline that is fast approaching. India’s tariff rate could soon rise to an eye-popping 50% thanks to a new levy enacted by Trump himself. These draconian measures have escalated the tone between trading nations. In the meantime, lots of other countries are rushing to get exemptions or reductions negotiated in.
Now, we see other countries having successfully negotiated reductions or perhaps just negotiated deals with Trump’s administration. These are in addition to the UK, Thailand, Cambodia, Vietnam, Indonesia, the Philippines, Japan, South Korea, Pakistan and European Union members. The general feeling is still one of doubt, as countries across the world are only just starting to face these added fiscal pressures.
Yet buried deep in Trump’s announcement was an ominous warning about semiconductor chips. He also announced that the U.S. intends to impose a tariff of up to 100% on imported chips. This is true for countries that don’t manufacture chips at home or don’t intend to begin domestic production. This clarification further emphasizes the administration’s combative approach to defend American manufacturing interests.
The impact of these tariffs is both serious and widespread. Most economists agree that higher tariffs will raise costs dramatically for American consumers. In doing so, they caution against retaliatory actions by the countries impacted.
“The only thing that can stop America’s greatness would be a radical left court that wants to see our country fail.” – Donald Trump