U.S. changes global trade policy with new tariffs
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U.S. President Donald Trump announced yesterday, during a press conference at the White House, that starting April 5th, global trade tariffs will come into effect, starting at 10% and gradually increasing for specific countries from April 9th. The new tariffs will affect not only U.S.' major trading partners but also emerging economies, and this structural shift in U.S. – and global – trade policy has not occurred since post-World War II period.
Mexico, Canada, and the EU
Mexico and Canada were not involved — partly due to the 25% tariffs already introduced in recent weeks — while the European Union will be subjected to a 20% tariff on all imports to the United States. The President of the European Commission, Ursula von der Leyen stated that they will increase global economic uncertainty and trigger a wave of protectionism that will mainly affect citizens.
Impact of the tariffs on China, Japan, and South Korea
Tariffs against Beijing have exceeded 50%, and China’s Minister of Commerce has requested the immediate removal of the tariffs by the U.S. tariffs, while the Chinese government has already declared that countermeasures will follow, not only in the form of tariffs but also related to the export of rare earths to the U.S. Furthermore, the so called “de minimis rule” is also being removed, which allowed fast fashion brands like Shein or Temu to import goods worth under $800 into the U.S. without tariffs.
South Korea will face a 25% tariff, and the government is already working on an emergency plan. The Japanese automotive industry, which exports $35 billion worth of cars to the U.S., will be severely impacted by the new tariffs.
Japan will see a tariff of 24%, and PM Shigeru Ishiba expressed his disapproval, highlighting that his country has invested billions in the U.S., which makes it illogical to implement additional tariffs. Minister of Commerce and Industry Yoji Muto stated that the government is working to negotiate with Washington to remove the new tariffs.
UK and Australia among the least affected countries
Among the countries least affected by the new tariffs there’s UK, which has been given a 10% tariff. However, analysts predict a slowdown in its growth forecasts, and not just that: the new trade policy under the Trump administration could lead to thousands of layoffs and force the Labour government to raise taxes or make further cuts to spending. Australia’s among the countries least affected by the new U.S. tariffs. However, Australian Prime Minister Anthony Albanese criticized the U.S. decision to apply a 10% tariff despite the Australian government not implementing any tariffs on the U.S., meaning the tariffs aren’t actually reciprocal in this case. However, Australia has decided not to adopt countermeasures.
Taiwan and India
Taiwan — subject to a 32% tariff — has called the new tariffs “unreasonable,” stating that these new trade rules will significantly impact the country’s economy: 60% of its GDP depends on exports. According to local sources, the Taiwanese government has been considering a response to the tariffs, including increasing energy exports from the U.S. and reducing its own tariffs to maintain a balanced trade relationship between the two countries. However, with the new tariffs, relations between Taiwan and U.S. could change suddenly.
India will face a 26% tariff, which will significantly impact $14 billion worth of electronic goods, $9 billion in gems and jewelry, the textile sector, but not the pharmaceutical industry. A senior Indian government official stated that this is a mixed outcome, and the government is considering the possibility of reducing tariffs on U.S. imports.
Mexico, Canada, and the EU
Mexico and Canada were not involved — partly due to the 25% tariffs already introduced in recent weeks — while the European Union will be subjected to a 20% tariff on all imports to the United States. The President of the European Commission, Ursula von der Leyen stated that they will increase global economic uncertainty and trigger a wave of protectionism that will mainly affect citizens.
Impact of the tariffs on China, Japan, and South Korea
Tariffs against Beijing have exceeded 50%, and China’s Minister of Commerce has requested the immediate removal of the tariffs by the U.S. tariffs, while the Chinese government has already declared that countermeasures will follow, not only in the form of tariffs but also related to the export of rare earths to the U.S. Furthermore, the so called “de minimis rule” is also being removed, which allowed fast fashion brands like Shein or Temu to import goods worth under $800 into the U.S. without tariffs.
South Korea will face a 25% tariff, and the government is already working on an emergency plan. The Japanese automotive industry, which exports $35 billion worth of cars to the U.S., will be severely impacted by the new tariffs.
Japan will see a tariff of 24%, and PM Shigeru Ishiba expressed his disapproval, highlighting that his country has invested billions in the U.S., which makes it illogical to implement additional tariffs. Minister of Commerce and Industry Yoji Muto stated that the government is working to negotiate with Washington to remove the new tariffs.
UK and Australia among the least affected countries
Among the countries least affected by the new tariffs there’s UK, which has been given a 10% tariff. However, analysts predict a slowdown in its growth forecasts, and not just that: the new trade policy under the Trump administration could lead to thousands of layoffs and force the Labour government to raise taxes or make further cuts to spending. Australia’s among the countries least affected by the new U.S. tariffs. However, Australian Prime Minister Anthony Albanese criticized the U.S. decision to apply a 10% tariff despite the Australian government not implementing any tariffs on the U.S., meaning the tariffs aren’t actually reciprocal in this case. However, Australia has decided not to adopt countermeasures.
Taiwan and India
Taiwan — subject to a 32% tariff — has called the new tariffs “unreasonable,” stating that these new trade rules will significantly impact the country’s economy: 60% of its GDP depends on exports. According to local sources, the Taiwanese government has been considering a response to the tariffs, including increasing energy exports from the U.S. and reducing its own tariffs to maintain a balanced trade relationship between the two countries. However, with the new tariffs, relations between Taiwan and U.S. could change suddenly.
India will face a 26% tariff, which will significantly impact $14 billion worth of electronic goods, $9 billion in gems and jewelry, the textile sector, but not the pharmaceutical industry. A senior Indian government official stated that this is a mixed outcome, and the government is considering the possibility of reducing tariffs on U.S. imports.