WASHINGTON: On Thursday (Aug 7), the United States imposed significantly higher tariffs on a wide range of economies, escalating President Donald Trump’s aggressive efforts to overhaul global trade.
An executive order signed by Trump last week officially took effect, increasing US tariffs from 10% to between 15% and 41% for a broad list of trading partners.
Products from countries such as the European Union, Japan, and South Korea are now subject to a 15% tariff, despite having negotiated deals with Washington to avoid even steeper hikes. Others, including India, face a 25% duty, which is set to double in three weeks. Meanwhile, imports from Syria, Myanmar, and Laos are hit with the highest rates — either 40% or 41%.
Shortly after midnight, Trump celebrated the move on Truth Social, writing: “IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!”
This latest wave of so-called “reciprocal” tariffs, aimed at countering what the US considers unfair trade practices, expands the measures Trump has reinstated since returning to office.
The increased duties, however, do not apply to certain sector-specific imports like steel, automobiles, pharmaceuticals, and semiconductors. On Wednesday, Trump announced plans to impose a 100% tariff on semiconductors — though Taiwan’s TSMC is expected to be exempt due to its US-based manufacturing facilities.
Despite the administration’s justifications, business groups and economists have raised concerns. Smaller American companies may bear the brunt of the costs, and analysts warn that the tariffs could stoke inflation and slow long-term economic growth. While some experts believe the inflationary effects may be temporary, others remain uncertain.
Marc Busch, an international trade policy professor at Georgetown University, said that with the 90-day delay in implementing the tariffs now over, importers who had built up inventories are beginning to run low. “With back-to-school shopping just weeks away, this will matter politically,” he said, suggesting that American consumers are likely to see more of the cost passed on.
Lingering Questions and Trade Tensions
The new tariff order has left some trade partners uncertain about their status. For instance, disagreements persist between Tokyo and Washington over when reduced US tariffs on Japanese cars will begin. The US has not set clear dates for tariff reductions for Japan, the EU, or South Korea, and a 25% duty still applies to most auto imports under a separate order.
A White House official told AFP that Japan’s 15% tariff is being added on top of existing duties, contradicting Tokyo’s expectations for some relief.
Meanwhile, the EU continues to push for exemptions, particularly for its wine industry. In a letter to Trump, the US Wine Trade Alliance and others warned that tariffs on wine could harm the restaurant industry, where wine sales can make up to 60% of gross margins.
New Flashpoints Emerge
Trump is also escalating trade tensions on other fronts. On Wednesday, he doubled the planned tariffs on Indian goods to 50%, citing India’s ongoing purchases of Russian oil. The additional 25% will take effect in three weeks. The same order warned of possible penalties for any country importing Russian oil “directly or indirectly,” as part of efforts to cut off funding for Russia’s war in Ukraine.
Exemptions remain in place for certain goods, including pharmaceuticals and smartphones.
Separately, Trump targeted Brazil over the prosecution of former president Jair Bolsonaro, a close political ally. US tariffs on several Brazilian products jumped from 10% to 50% on Wednesday. While some key items — such as orange juice and civil aircraft — were spared, other major exports like coffee, beef, and sugar were not.
Many of these sweeping tariffs are already facing legal challenges, particularly over Trump’s use of emergency economic powers. These cases are expected to ultimately be decided by the US Supreme Court.
