Trump's tariff reset: From Canada to Laos, even dealmakers face higher costs as legal fight brews; US allies & rivals hit with steep import taxes

Time of India

a day ago

US President Donald Trump's sweeping new tariff regime, set to take effect August 7, has triggered a wave of economic disruption across the globe, from low-income nations like Laos and Algeria to wealthy trade partners such as Canada and Switzerland.
Under the new policy, countries face steep new import duties unless they agree to revised trade terms with the US. Trump has framed the plan as a campaign for "fairness" under the slogan of "Liberation Day," invoking a 1977 law to declare the trade deficit a national emergency and bypass Congress. But legal and economic blowback is mounting, with US courts weighing challenges and allies questioning Washington's reliability, AP reported.
'Everybody's a loser': Experts flag fallout
"In many respects, everybody's a loser here," said Barry Appleton, co-director of the Center for International Law at New York Law School. "The U.S. consumer's a big loser," added Alan Wolff, a former WTO deputy director-general and trade official.
Even countries that struck deals to reduce their tariff exposure are still facing steeper import duties than before. The UK agreed to raise tariffs on its exports to the US from 1.3% to 10%, despite the US running a trade surplus with it for nearly two decades.
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The EU and Japan accepted 15% tariffs, lower than the threatened rates but still significantly higher than last year's levels.
Steep tariffs for those resisting Trump's demands
Nations that refused to negotiate fared far worse. Laos and Algeria, despite low per capita incomes, now face tariffs of 40% and 30% respectively. Brazil was slapped with a 50% levy, reportedly over its treatment of former president Jair Bolsonaro. Canada drew a 35% tariff, tied in part to its position on Palestinian statehood.
Even Switzerland, which did not reach an agreement, was hit with a 39% import tax, exceeding the originally announced 31%.
"The Swiss probably wish that they had camped in Washington to make a deal," said Wolff, now a senior fellow at the Peterson Institute for International Economics.
Legal battle escalates as costs rise for US consumers
Five US businesses and 12 states have filed lawsuits against the new tariffs, arguing that Trump overstepped his authority. In May, the US Court of International Trade sided with plaintiffs, blocking the tariffs, though collections continue during the appeal process.
Economists at Goldman Sachs estimate that US businesses and consumers are absorbing most of the cost. Companies including Walmart, Nike, Best Buy and Procter & Gamble have all raised prices in response.
"This is a consumption tax, so it disproportionately affects those with lower incomes," said Appleton. "Your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to go up."
According to Yale University's Budget Lab, the average US tariff has jumped from 2.5% at the start of 2025 to 18.3%, the highest since 1934. The lab estimates this will cost the average US household $2,400 annually.
Winners still end up paying more
Even countries that reached deals to avoid Trump's harshest penalties are still absorbing high tariffs. Taiwan saw its rate lowered from 32% to 20%, and Angola's from 32% to 15% — but both were paying less than 2% before the new policy.
Lesotho, one of the poorest nations affected, saw its tariff reduced from 50% to 15%, though economists say the damage may already be done.
"He [Trump] wants to do it because he found an undervalued franchise -- not because the market says you need to do a deal," said Wolff, referring to Trump's transactional approach to global trade.
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