The White House has announced a new set of tariffs affecting approximately 100 countries, including significant global players such as the United Kingdom, Singapore, Brazil, and Australia. In making this decision, the Biden Administration seeks to redress a long history of trade imbalances and shield American industries from foreign predation. Additionally, tariff rates vary widely both in terms of magnitude and by country. The European Union is hit by a 20% tariff, while China faces a harsh 34% tariff.
The tariffs are thus a continuation of the United States’ focus on recalibrating its trade relationships. Countries like New Zealand, Turkey, Colombia, and most recently—Argentina—joined these countries in the long list of countries whose commitments no longer seem sufficient. Each of these countries will be subjected to different tariff rates that are based on their trade relationship with the U.S.
Tariff rates for several countries have been established as follows: Vietnam is subject to the highest rate at 46%, while the European Union and China follow with 20% and 34% respectively. Tariffs will be applied to other countries such as El Salvador, the United Arab Emirates, and Saudi Arabia. This change will bring U.S. trade policy into even broader territory.
The justification for these tariffs comes from decades-old grievances about U.S. trade imbalances and unfairly competitive foreign practices. The administration believes that imposing these tariffs will stimulate domestic production. They are confident that this action will bring more fairness to the playing field for American businesses.
The publication of this list is a watershed moment in U.S. trade policy. Importantly, it might elicit reactions from other states that are the subject of such activity. It’s not just here – other major industrialized countries, particularly in Europe and Asia, have expressed their concerns. They are concerned that these countermeasures would deepen already high trade tensions.