Trump’s Tariff Threats Roil Global Trade
Canada, Brazil, and over 20 nations face potential import tax hikes starting August 1.
Former U.S. President Donald Trump is escalating trade tensions by threatening increased tariffs on numerous countries if they don’t agree to new deals. These potential taxes, outlined in letters sent this week, are slated to take effect August 1, creating uncertainty in international commerce.
Canada Faces Significant Tariff Hike
While Canada did not receive a letter in April, it already confronts tariffs on steel and aluminum. Now, Trump has declared that a 35% tariff will be imposed on Canadian goods beginning August 1, potentially straining the relationship between the two nations.
Brazil Threatened with 50% Tariff
Brazil is facing a steep 50% tariff starting August 1. Unusually, Brazil had not been previously warned about these elevated “reciprocal”
rates. However, like almost every other country, Brazil has already dealt with at least a 10% levy on goods entering the U.S. since April.
In response, Brazilian President Luiz Inacio Lula da Silva warned that Trump’s tariffs would trigger Brazil’s economic reciprocity law, allowing the suspension of agreements against countries harming its competitiveness, while noting the U.S. has held a trade surplus of over $410 billion with Brazil over the past 15 years.
Responses from Other Nations
Several other nations have also received tariff letters, and here’s how they are reacting:
Myanmar
Tariff rate: 40% starting August 1, down from 44% in April. A spokesperson for Myanmar’s military government, Maj. Gen. Zaw Min Tun, stated they would pursue negotiations.
Cambodia
Tariff rate: 36% starting August 1, reduced from 49% in April. Negotiator Sun Chanthol highlighted the successful decrease in the tariff and expressed readiness for further talks, urging garment workers and factory owners not to panic.
Thailand
Tariff rate: 36% starting August 1, unchanged from April. Deputy Prime Minister Pichai Chunhavajira said Thailand is pushing for negotiations, proposing to open the Thai market for more American agricultural and industrial products, and increasing imports of energy and aircraft.
Bangladesh
Tariff rate: 35% starting August 1, down from 37% in April. Finance adviser Salehuddin Ahmed expressed hope for a better outcome through negotiation, noting concerns about competitiveness with Vietnam and India.
Japan
Tariff rate: 25% starting August 1, increased from 24% in April. Prime Minister Shigeru Ishiba called the tariff “extremely regrettable”
but remains determined to continue negotiating.
South Korea
Tariff rate: 25% starting August 1, the same as announced in April. The Trade Ministry announced plans to accelerate negotiations to reach a deal before the tariffs take effect.
List of Affected Nations & Rates
Here’s a quick look at other countries facing tariffs:
- Laos: 40% (down from 48%)
- Serbia: 35% (down from 37%)
- Indonesia: 32% (unchanged)
- Algeria: 30% (unchanged)
- Bosnia and Herzegovina: 30% (down from 35%)
- Iraq: 30% (down from 39%)
- Libya: 30% (down from 31%)
- South Africa: 30% (unchanged); President Cyril Ramaphosa’s office stated that the tariff rates mischaracterized the trade relationship and proposed a trade framework on May 20.
- Sri Lanka: 30% (down from 44%)
- Brunei: 25% (up from 24%)
- Moldova: 25% (down from 31%)
- Kazakhstan: 25% (down from 27%)
- Malaysia: 25% (up from 24%); the government plans talks with the U.S.
- Tunisia: 25% (down from 28%)
- Philippines: 20% (down from 17%)
The Peterson Institute for International Economics estimates that these tariffs could disrupt global supply chains, potentially raising consumer prices (PIIE 2024).
These tariff threats signal a possible shift in U.S. trade strategy, one that could reshape international commerce. It remains to be seen whether these tactics will lead to new trade agreements or further escalate global trade tensions.
