New tariff rates on U.S. imports, initiated under President Donald Trump’s administration, came into effect on Thursday, marking a significant development in his reshaping of global trade.
These measures include potential tariffs of up to 200% on pharmaceutical imports and a 100% import tax on computer chips.
Most U.S. imports of copper, steel, and aluminium are now subject to a 50% duty.
Significant uncertainty persists, with no agreement yet reached on tariffs for products from China.
India also faces a potential 50% tariff, as the U.S. pressures the nation to cease oil purchases from Russia.
Recent data indicates uncertainty is now clouding the outlook for global exporters, as the rush to beat the tariffs during a pause for negotiation tapers off. Companies are reporting billions of dollars in higher costs or losses due to these increased import duties.
Despite the economic pressures, global financial markets took Thursday’s tariff adjustments in stride, with Asian shares and U.S. futures mostly higher.
The tariffs announced on August 1 apply to 66 countries, Taiwan and the Falkland Islands. They are a revised version of what Trump called “reciprocal tariffs,” announced on April 2: import taxes of up to 50% on goods from countries that have a trade surplus with the United States, along with 10% “baseline’’ taxes on almost everyone else. That move triggered sell-offs in financial markets and Trump backtracked to allow time for trade talks.
The president has bypassed Congress, which has authority over taxes, by invoking a 1977 law to declare the trade deficit a national emergency. That’s being challenged in court, but the revised tariffs still took effect.
To keep their access to the huge American market, major trading partners have struck deals with Trump. The United Kingdom agreed to 10% tariffs and the European Union, South Korea and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year, but down from the 30% Trump had ordered for the EU and the 25% he ordered for Japan.
Countries in Africa and Asia are mostly facing lower rates than the ones Trump decreed in April. Thailand, Pakistan, South Korea, Vietnam, Indonesia and the Philippines cut deals with Trump, settling for rates of around 20%.
Indonesia views its 19% tariff deal as a leg up against exporters in other countries that will have to pay slightly more, said Fithra Faisal Hastiadi, a spokesperson in the Indonesian president’s office.
“We were competing against Vietnam, India, Bangladesh, Sri Lanka and China … and they are all subject to higher reciprocal tariffs,” Hastiadi said. “We believe we will stay competitive.”
Trump has yet to announce whether he will extend an August 12 deadline for reaching a trade agreement with China that would forestall earlier threats of tariffs of up to 245%.
