More than 60 countries around the world are scrambling to respond to the latest wave of US tariffs announced by Donald Trump, which came into force on Thursday.
Industry representatives in rich and poor countries warned of job losses as the tariffs upended a decades-old world trading system with rates ranging from 10% to 39%, 40% and 41% for Switzerland, Brazil and Syria.
All over the globe, leaders were attempting to put contingencies in place after Trump’s tariff threats turned to reality at a minute past midnight Washington time.
The Brazilian government said it was planning a state aid plan for companies affected. The president, Luiz Inácio Lula da Silva, said the duties were “unacceptable blackmail”.
Switzerland said it was seeking new talks with the US after a last-gasp mission to Washington by its president, Karin Keller-Sutter, failed to stop a 39% tariff blow that industry group Swissmem described as a “horror scenario”.
In a statement after an emergency meeting with Keller-Sutter, the Swiss cabinet said the tariffs would “place a substantial strain on Switzerland’s export-oriented economy”.
“For the affected sectors, companies and their employees, this is an extraordinarily difficult situation,” Keller-Sutter told reporters.
Taiwan is also continuing talks with the US. Its president, Lai Ching-te, said the 20% rate imposed on the key Washington ally was “temporary”.
Ireland, which is locked into an EU-US deal setting the tariff ceiling at 15%, said it would publish a new plan for diversifying an economy that relies heavily on US multinationals including Intel, Pfizer and Johnson & Johnson, all in Trump’s crosshairs.
Despite a last minute reprieve from Trump for Lesotho with tariffs dropping from 50% to 15%, the impoverished African nation said it was already hurting.
Textile industry players in the country – which produces jeans and other garments for US companies including Levi and Walmart – said the uncertainty around tariffs over the past few months had already devastated the sector, with orders cancelled and jobs cut.
Laos, which, like Brazil and Myanmar, was hit with a 40% rate, was among those handed a steep increase in import duties because of a trade imbalance with the US.
“A 40% tariff is just a nail in the coffin for any industry trying to ship to the United States,” Johannes Somers, the executive chair of the garment manufacturing firm Diep Vu, told Agence France Presse.
“We estimate about 20,000 workers or more could be impacted,” added Xaybandith Rasphone, the head of the Association of the Lao Garment Industry.
The sweeping “reciprocal” rates were announced by the White House a week ago, just before a previous 1 August deadline was due to elapse.
Just before the tariffs came into effect at midnight, Trump claimed on social media that billions of dollars would start flowing into the US as a result.
However, while the customs duties make countries’ exports more expensive and less competitive, they are payable on import and usually passed on to the customer.
“The only thing that can stop America’s greatness would be a radical left court that wants to see our country fail,” the president wrote in capital letters, referencing an ongoing case in the US court of appeals, which is considering whether he exceeded his authority in imposing the tariffs.
Some trading partners had already secured reductions through negotiations or by striking deals, including the UK, Thailand, Cambodia, Vietnam, Indonesia, the Philippines, Japan, South Korea, Pakistan and the EU.
The EU is the only trading partner where its baseline rate of 15% will include previous tariffs. It means, for example, cheeses that are normally hit with import duties of 14.9% will be taxed at 15% and not 29.9%.
However, the deal has only been implemented in part with tariffs of 27.5% still being imposed on EU car imports while the details of the US-EU deal are being finalised.
Hildegard Müller, the president of the German car industry federation, said the EU-US deal had “brought no clarity or improvement” to the industry.
“The sectoral tariffs on cars and automotive parts of 27.5%, which have been in effect since April and May respectively, remain in place and place a significant burden on German automakers and automotive suppliers, as well as on transatlantic trade.
“It is important that the promised agreement is reached now and the relief measures are implemented promptly,” she said.
India’s 25% tariff rate could rise to a total of 50% after Trump signed an executive order on Wednesday imposing an additional levy in retaliation for the country’s purchase of oil from Russia. Delhi has 21 days to respond. Trump has threatened to use the same tactic on other countries that supply Russia. (Guardian)
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