Trump unveils slew of new tariffs, punishes Canada
However, in a minor reprieve that opens the door to further negotiations, the White House said the measures will take effect in a week for most countries, not Friday as previously expected.
The tariffs are a demonstration of raw economic power that Trump sees putting US exporters in a stronger position while encouraging domestic manufacturing by keeping out foreign imports.
But the muscular approach has raised fears of inflation and other economic fallout in the world's biggest economy.
Trump raised duties on nearly 70 economies, from a current 10% level imposed in April when he unleashed "reciprocal" tariffs citing unfair trade practices.
The new, steeper levels listed in an executive order vary by trading partner and go as high as 41%.
Any goods "transshipped" through other jurisdictions to avoid US duties would be hit with an additional 40-percent tariff, the order said.
The American leader separately hiked tariffs on Canadian goods from 25% to 35% -- starting Friday.
He had warned of trade consequences for Canada after Prime Minister Mark Carney announced plans to recognise a Palestinian state at the UN General Assembly in September.
- 'Tears up' rule book -
"Wow! Canada has just announced that it is backing statehood for Palestine," Trump wrote on Truth Social ahead of the announcement.
"That will make it very hard for us to make a Trade Deal with them."
But Trump gave more time to neighbour and major trading partner Mexico, delaying for 90 days a threat to increase tariffs from 25% to 30%, after holding talks with President Claudia Sheinbaum.
Canada and Mexico face a separate US tariff regime. Exemptions remain, however, for imports entering the United States under a North American trade pact.
With questions hanging over the effectiveness of bilateral trade deals already struck -- including with the European Union and Japan -- the outcome of Trump's overall plan remained uncertain.
"No doubt about it -- the executive order and related agreements concluded over the past few months tears up the trade rule book that has governed international trade since World War II," said Wendy Cutler, senior vice president of the Asia Society Policy Institute.
"Whether our partners can preserve it without the United States is an open question," she added.
The elevated duties come after Washington twice postponed their implementation amid a frantic series of negotiations, alongside announcements of new duties and deals with partners.
The 79-year-old Republican has made tariffs core to his protectionist brand of hard-right politics. On Thursday, he claimed the US economy had "no chance of survival or success" without tariffs.
- Frantic negotiations -
But the latest salvo came amid legal challenges against Trump's use of emergency economic powers.
After a lower court said the president exceeded his authority, the US Court of Appeals heard arguments Thursday in cases against Trump's blanket tariffs targeting different countries.
While the president has touted a surge in customs revenues this year, economists warn the duties could fuel inflation.
Proponents of his policy argue their impact will be one-off, but analysts are awaiting further data to gauge for more persistent effects.
Those who managed to strike deals with Washington to avert steeper threatened levies included Vietnam, Japan, Indonesia, the Philippines, South Korea and the European Union.
Among other tariff levels adjusted in Trump's latest order, Switzerland now faces a higher 39% duty.
The tariff on Taiwanese products was revised down to 20% from 32%, but its President Lai Ching-te vowed to seek an even lower level.
In Southeast Asia, Phnom Penh and Bangkok welcomed news that they each face a 19-percent tariff -- down from initial threatened levels of 49% on Cambodia and 36% on Thailand.
Britain also reached a pact with the United States, although it was not originally targeted by higher "reciprocal" tariffs.
Notably excluded from the drama was China, which faces an Aug 12 deadline instead, when duties could bounce back to higher levels.
Washington and Beijing at one point brought tit-for-tat tariffs to triple-digit levels, but both countries have agreed to temporarily lower these duties and are working to extend their truce.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bangkok Post
an hour ago
- Bangkok Post
Myanmar remains upbeat on trade talks despite 40% Trump tariffs
NAY PYI TAW — Myanmar's military government said it remains upbeat on reaching a deal with the US to see a decrease in US President Donald Trump's new tariffs of 40% on goods from the Southeast Asian country. 'The US continues to negotiate with us on this so it's still in a stage of negotiation,' Zaw Min Tun, chief spokesman of the ruling State Security and Peace Commission, told Bloomberg News on Saturday. Myanmar has offered to reduce its tariff on American goods entering the country to a range of 0%-15%, from the previous rate of 88%, and expects the ones imposed by the United States to drop to a range of 0%-7%, he said. The nature and channel of ongoing discussions between the US and Myanmar is not immediately clear as Washington has imposed sanctions on most of Myanmar generals and cabinet members following a military coup that ousted Aung San Suu Kyi-led civilian government in 2021. Last month, junta chief Min Aung Hlaing praised Donald Trump in a rare letter and compared his military's coup to the American president's baseless claims of US election fraud, suggesting both leaders were victims of rigged votes. In there, he requested a reduced tariff rate and offered to send a high-level trade delegation to Washington. Myanmar's bilateral trade with the US is relatively small compared to other countries in the region. The value of two-way trade was US$588.3 million in the fiscal year ended March, down from $701.9 million a year earlier, while the US continued to see a trade deficit, according to government data. Myanmar has been struggling with a crippling economy and a growing civil war since the military seized power more than four years ago. Earlier this week, the regime lifted a 54-month state of emergency, paving way for long-promised general elections in December which many countries consider as a sham.
Bangkok Post
10 hours ago
- Bangkok Post
Tax shift props up the auto industry
Former prime minister Thaksin Shinawatra said during a recent conference that the government should impose a high excise tax on imported electric vehicles (EVs) that use a low proportion of local content. Thailand's free trade agreements (FTAs) with some countries have resulted in a 0% import tariff on EVs, which hampers the domestic auto industry. Thaksin said imported EVs should be required to use a minimum level of local content, such as car seats, to protect the domestic industry. Thailand signed an FTA with China primarily using the Asean-China FTA framework around 20 years ago, setting zero tariffs on imports, including EVs. Following the speech, the Excise Department is preparing to adjust the excise tax structure for vehicles, linking it to the use of local content. Imported EVs with a high proportion of domestically manufactured components will, in principle, be eligible for a lower excise tax rate than those with a smaller proportion of local content. Fully imported vehicles or completely built-up units would be subject to higher excise taxes. According to Deputy Finance Minister Paopoom Rojanasakul, the goal is to support the domestic auto parts industry by encouraging the automotive sector to increase the use of domestically manufactured parts via tax incentives. However, pundits say it is likely such attempts partially stem from ongoing US tariff threats.  Will lower import tariffs give American cars a competitive edge? Thailand's automotive industry is unlikely to be affected by the reduction of import tariffs as American vehicles do not have any advantages over cars produced in Southeast Asia, especially in Thailand, in terms of parts prices, quality, or the speed of model updates, said Sompop Manarungsan, an analyst on the Chinese and American economies. Chinese and Japanese automakers tend to update models faster, responding to consumer demand more effectively than US automakers, he said. Mr Sompop said American cars have always struggled to penetrate foreign markets, even when import tariffs were low. For example, in Japan American cars have a limited market share due to these reasons. The global automotive industry is also transitioning towards EVs. In the US, Tesla is the only major EV manufacturer as the first administration of US President Donald Trump ended policies promoting EVs, hindering the development of the country's EV industry. Meanwhile, Southeast Asia's auto industry, particularly Thailand, is increasingly shifting to EVs. As well as being more affordable, there is a wider range of attractive models and they are more energy-efficient than cars powered by internal combustion engines (ICE), said Mr Sompop. From 2022 to 2024, the popularity of battery EVs (BEVs), plug-in hybrid EVs (PHEVs) and hybrid EVs (HEVs) in Thailand surged. EV registrations rose from 84,500 units in 2022 to 206,000 units in 2024. During that period, 644 projects applied to the Board of Investment (BoI) for investment promotion for EV production and parts, with a combined investment value exceeding 280 billion baht. In the first half of 2025, 57,289 new BEV passenger cars were registered in Thailand, a 52% increase year-on-year, accounting for more than 15% of all new car registrations, the highest proportion in the region. Thailand has more than 203,000 registered BEV passenger cars, 71,900 electric motorcycles, 3,800 electric buses and trucks, and 1,000 electric three-wheelers.  What is the state of the EV market in Thailand? Many Chinese EV brands built manufacturing plants in Thailand, including battery factories. However, intense price competition forced some EV brands out of the market, requiring them to return government incentives, such as EV purchase subsidies of up to 150,000 baht per car and excise tax reductions, in addition to tax penalties. Due to this fierce competition, the National EV Policy Committee, also known as the EV Board, was compelled to adjust the production-to-import compensation measures to prevent an EV glut in the domestic market. The board last week eased production requirements for EV manufacturers participating in EV incentive schemes if they produce BEVs for export, in an effort to promote Thailand as an EV export base. The two schemes -- EV3.0 and EV3.5 -- require manufacturers to produce EVs locally to compensate for imported vehicles since the start of the schemes in 2022 prior to commencing local production. These production requirements have become an uphill task for companies as the domestic market stagnates. Under EV3.0, companies that started producing BEVs in 2024 are committed to a 1:1 ratio target, meaning they must produce one BEV domestically for every EV they import. If commencing production in 2025, the ratio is set at 1.5 locally produced BEV for each imported BEV. The ratios are set at 1:2 and 1:3 for manufacturers under the EV3.5 programme, which is aimed at propelling EV industry growth between 2024 and 2027. This approach, proposed by the Federation of Thai Industries, is expected to increase the number of EV exports to roughly 12,500 units this year and 52,000 units in 2026.  What is the goal of the tax promotion measures for EVs? Thailand clearly wants to shift from being a leading producer of ICE-powered vehicles -- ranked 10th globally in 2023 -- to production of EVs. To support this transition, the Excise Department designed tax measures to attract automakers to establish EV production bases in here, especially for EV components, such as inverters, which convert direct current (DC) into alternating current (AC); batteries; battery management systems, which monitor and control the battery system to ensure safety, performance and lifespan; and drive control units, which manage the propulsion of electric motors by processing inputs from the accelerator, steering, and braking systems and sending commands to the inverter. A source from the Excise Department who requested anonymity said after the EV promotion measures expire in 2025, the department plans to implement tax measures to make Thailand a production base for EVs, particularly for the manufacturing of key components. To qualify for a 2% excise tax rate, manufacturers must use domestically produced parts as specified. If they do not use the required locally produced components, the excise tax rate will be 10%, said the source. The requirement to use locally made components will be implemented in stages, noted the source. Starting in 2026, automakers wishing to benefit from the lower tax rate must use batteries manufactured within the country, whether at the cell, module or pack level. All EV manufacturers with facilities in Thailand are capable of producing batteries at the pack level. By 2030, automakers must use inverters manufactured domestically to qualify for the lower excise tax rate. However, if a car manufacturer invests in a battery cell production facility, it is not required to invest in an inverter production plant. By 2035, manufacturers are required to invest in the production of battery management systems and drive control units. As for fully imported vehicles from China that avoid import tariffs under the Asean-China FTA, the Excise Department plans to coordinate with the BoI for the latter to issue support measures for EVs that use local content, according to the source, meaning imported EVs meeting the specified proportion of local content will be eligible for a lower excise tax rate. Investment promotion for EV production, key components, charging stations, and battery swapping stations tallied a cumulative value of 138 billion baht, including: 21 BEV manufacturing projects with a total investment of 41 billion baht and a combined production capacity of 386,000 units per year; 16 electric motorcycle manufacturing projects with a total investment of 990 million baht and a combined production capacity of 810,000 units per year; and three electric bus and truck manufacturing projects with a total investment of 2.20 billion baht and a combined production capacity of 4,800 units per year. For battery manufacturing plants, there were 53 projects with a total investment of 80.1 billion baht. Production of other key components such as traction motors, battery management systems, drive control units, and on-board chargers tallied 42 projects with a total investment of 6.52 billion baht. EV charging stations garnered 29 projects with a total investment of 5.56 billion baht to install 20,080 charging points, including 7,360 quick-charge points. There were five battery swapping station projects with a total investment of 1.28 billion baht, comprising 555 stations for motorcycles, seven stations for large commercial vehicles, and six stations for passenger cars. As of March 2025, there were 3,720 public EV charging stations with 11,622 charging points nationwide. These consist of 6,524 DC (fast) chargers and 5,098 AC chargers, with coverage across all regions of the country. Government support for the transition from ICE vehicles to EVs included an excise tax reduction for hybrid vehicles that emit no more than 100 grammes per kilogramme of CO2 to 6% for seven years. Tax incentives were also revised for PHEVs, which can be developed into EVs in the future. The previous qualification for the 5% excise tax rate had two conditions: an electric range of at least 80 kilometres per full charge and a fuel tank capacity not exceeding 45 litres.
Bangkok Post
10 hours ago
- Bangkok Post
Adding up the list of Thai concessions
Negotiations with the US that concluded with a 19% tariff on Thai exports were broadly focused on trade concessions. What did Thailand offer to secure the 19% rate? The US reciprocal tariff rate on Thai exports dropped from a threat of 36%, effective starting on Thursday, in exchange for several significant Thai concessions. Thailand proposed eliminating import duties for more than 10,000 items imported from the US (out of roughly 11,000 items in total), mostly consisting of goods that are not produced domestically or are insufficiently produced, such as medical instruments, advanced auto parts, and specialised food products. Thailand also reduced non-tariff barriers, streamlining customs procedures and implementing a "post-clearance audit" system, while simplifying regulations to facilitate US imports. In addition, the country committed to purchase liquefied natural gas from the US, as well as crude oil, ethane, aircraft, and agricultural products that Thailand does not produce or produces insufficiently, such as animal feed corn. The goal is to reduce the trade surplus of more than $35 billion by half within five years. A major focus of the talks was stricter rules of origin, with Thailand adopting more rigorous rules of origin for export products to prevent the country being used to circumvent US tariffs, especially for transshipment of Chinese goods. The US plans to implement its new rules of origin worldwide. The specific details remain unclear, but the US wants to prevent circumvention of import tariffs by third countries. Thailand is also increasing quotas for the import of US corn, while lowering import duties for soybeans. However, Thailand retained tariffs on sensitive products, or those that would impact domestic farmers. In terms of regional security cooperation, Thailand committed to increased efforts, especially regarding de-escalating border tensions with Cambodia. There were no discussions on granting gas concession rights or military base access to the US. The Trump administration said it had concerns over market access, trade imbalances and investment, while Thailand wanted continued protection for its most vital domestic industries.
