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US President Donald Trump’s latest wave of tariffs on exports from dozens of trading partners, including Canada, Brazil, India and Taiwan, sent global markets tumbling on Friday as countries pushed for talks to clinch better deals.
Trump’s new tariff rates include a 35 per cent duty on many goods from Canada, 50 per cent for Brazil, 25 per cent for India, 20 per cent for Taiwan and 39 per cent for Switzerland.
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The presidential order listed higher import duty rates of 10 per cent to 41 per cent starting in seven days for 69 trading partners, effectively taking the US effective tariff rate to about 18 per cent, from 2.3 per cent last year, according to Capital Economics.
Global shares stumbled, with the Stoxx 600 down around 1 per cent in the first hour of trading, and 1.7 per cent lower on the week and set for its biggest weekly drop since early April.
Both Nasdaq futures and S&P 500 futures were down around 1 per cent.
The market response was not as volatile as April’s global asset declines, said Wei Yao, research head and chief economist in Asia at Societe Generale, referring to the market slide after Trump’s initial tariffs announced on April 2.
“We are all getting much more used to the idea of 15-20 per cent tariffs being manageable and acceptable, thanks to the worse threats earlier,” she said.
But Trump’s tariff rollout comes amid evidence they have begun driving up prices.
US Commerce Department data released Thursday showed prices for home furnishings and durable household equipment jumped 1.3 per cent in June, the biggest gain since March 2022.
No winners?
Countries hit with hefty tariffs said they will seek to negotiate with the US in hopes of getting a lower rate.
Switzerland said it would push for a “negotiated solution” with the US.
“I am stunned. These tariffs are based on no rational basis and are arbitrary,” said Stefan Brupbacher, director of manufacturers’ association Swissmem.
Taiwan President Lai Ching-te said the new 20 per cent tariff rate for the island was “temporary ” and that he expected to reach a lower figure.
South Africa’s Trade Minister Parks Tau said he was seeking “real, practical interventions” to defend jobs and the economy against the 30% U.S. tariff it faces.
Southeast Asian countries breathed a sigh of relief after the US tariffs on their exports that were lower than threatened and levelled the playing field with a rate of about 19 per cent across the region’s biggest economies.
Thailand’s finance minister said a reduction from 36 per cent to 19 per cent would help his country’s economy.
“It helps maintain Thailand’s competitiveness on the global stage, boosts investor confidence and opens the door to economic growth, increased income and new opportunities,” Pichai Chunhavajira said.
Australian products could become more competitive in the US market, helping businesses boost exports, Trade Minister Don Farrell said, after Trump kept the minimum tariff rate of 10 per cent for Australia.
But businesses and analysts said the impact of Trump’s new trade regime would not be positive for economic growth.
“No real winners in trade conflicts,” said Thomas Rupf, co-head Singapore and CIO Asia at VP Bank. “Despite some countries securing better terms, the overall impact is negative.”
“The tariffs hurt the Americans and they hurt us,” winemaker Johannes Selbach said in Germany’s Moselle Valley.
“Thousands of families who produce wine in Europe and thousands of families in the importing, wholesaling, retailing, restaurant business in the US are dependent on the flow from both sides,” he said, adding jobs and profits would be hit.
Goods from all other countries not listed in Trump’s executive orders will face a 10 per cent US import tax.
Trump had previously said that rate might be higher. The administration also teased that more trade deals were in the pipeline.
Canada, Indian and China
The Republican president has tapped emergency powers, pressured foreign leaders, and pressed ahead with trade policies that sparked a market sell-off when they were first announced in April.
Trump’s order said some trading partners, “despite having engaged in negotiations, have offered terms that, in my judgment, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters.”
Trump issued a separate order for Canada that raises the rate on Canadian goods subject to fentanyl-related tariffs to 35 per cent, from 25 per cent previously, saying Canada had “failed to cooperate” in curbing illicit narcotics flows into the US.
The higher tariffs on Canadian goods contrasted sharply with Trump’s decision to grant Mexico a 90-day reprieve from higher tariffs of 30 per cent on many goods to allow time to negotiate a broader trade pact.
Canadian Prime Minister Mark Carney said he was disappointed by Trump’s decision, and vowed to take action to protect Canadian jobs and diversify exports.
India is in trade talks with the US after Washington imposed a 25 per cent tariff on New Delhi, a move that could impact about $40bn worth of its exports, an Indian government source with knowledge of the talks told Reuters on Friday.
China is facing an August 12 deadline to reach a durable tariff agreement with Trump’s administration. A US official told reporters that they are making progress toward a deal.
The European Union struck an agreement on a blanket 15 per cent tariff with the US at the end of July.
The bloc’s trade chief Maros Sefcovic said the framework deal the EU signed with the US gave EU exporters a “more competitive position.”
