Trump's blitz pushes US levies to highest levels since 1930s
The wall of levies announced by the president since he took office again in January has taken the country's effective tariff level to an estimated 17.3 per cent, according to Yale University's Budget Lab.
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Sydney Morning Herald
13 minutes ago
- Sydney Morning Herald
New trade war looms as Trump's disruptive tariffs become reality
'Grateful for small mercies' is a phrase that springs to mind after US President Donald Trump failed to follow through on his previous threats and allowed Australian goods to continue being subject to a US tariff of 10 per cent. Should Trump have made good on his ultimatums to hike the levy to 15 or 20 per cent, it would not have been the action of a special friend, especially given the US already enjoys a trade surplus with Australia. Displaying his patented bluster and blunder, Trump announced his tariff regime last April on what he called Liberation Day. It barely discriminated between friend or foe, tanked stock markets, caused the gold price to soar, and imposed a universal 10 per cent tariff on all imports, with Asian nations hit with even steeper tariffs. Four months later, some clarity has emerged. Trump's battery of new tariffs on more than 60 countries starts on August 7. He kept Australia on the same 10 per cent rate as another close ally, the United Kingdom. However, he was not so disposed to other allies: although the US imports more to Canada, he lifted the tariff from 25 per cent to 35 per cent. Trump hit New Zealand too, with a surprise 5 per cent rise to a 15 per cent tariff. None of this is set in stone and Trade Minister Don Farrell has confirmed Canberra will continue to lobby for the removal of all tariffs on Australian goods. But if Australia has dodged a bullet for the moment, there is no getting away from the harsh reality that the tariffs imposed by Trump on other major economies are likely to slow global economic activity and eventually could hurt our relatively small, export-driven economy. Loading Trump is attempting to put America First by scrapping the world trading system with his own scheme, which presumes nations must jump through his hoop. In an inconsiderate slight, the US did not even bother to confirm Australia was exempt from higher tariffs, but left it to a White House fact sheet to confirm any countries not on the new list would remain on 10 per cent. Last April, when the US tariffs were first announced, Opposition Leader Peter Dutton slammed Prime Minister Anthony Albanese as a leader of a bad government who could not get a phone call with Trump to discuss tariffs. Little appears to have changed.
News.com.au
33 minutes ago
- News.com.au
Trump unveils slew of new tariffs, punishes Canada
President Donald Trump unveiled new tariffs Thursday on nearly 70 countries -- including a blistering 35 percent on neighbor Canada -- as he seeks to reshape global trade to benefit the US economy. 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 percent 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 percent. 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 percent to 35 percent -- starting Friday. He had warned of trade consequences for Canada after Prime Minister Mark Carney announced plans to recognize 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 neighbor and major trading partner Mexico, delaying for 90 days a threat to increase tariffs from 25 percent to 30 percent, 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 percent duty. The tariff on Taiwanese products was revised down to 20 percent from 32 percent, 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 percent on Cambodia and 36 percent 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 August 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.
Sydney Morning Herald
43 minutes ago
- Sydney Morning Herald
Trump was never that interested in Australia. Albanese made sure to keep it that way
Washington: Australia fought hard for an exemption to Donald Trump's steel and aluminium tariffs early in the year and got nowhere, despite positive signs from people close to the US president. The next time around, it took a different tack. Partly that was out of necessity: the 'reciprocal tariffs' went into effect just as Australia entered a federal election campaign. But there was also a view among Australian officials that there was little value in being one of the first movers. After all, Australia copped the lowest possible rate on April 2 – 10 per cent – so it was difficult to protest too much, even if it seemed unfair. And the risk was that the United States would demand more than we were willing to give. That view intensified when the United Kingdom became the first country to strike a deal – of sorts – with Trump, but still got lumped with a 10 per cent tariff. The baseline is the baseline; there's not much you can do. Prime Minister Anthony Albanese was lambasted by his political opponents for failing to secure a face-to-face meeting with Trump, and being stood up at the G7 when Trump left early. And perhaps in the counterfactual, he would have charmed the president and secured the complete tariff reprieve Australia seeks. You never know. Loading But the better analysis is probably that lying low paid dividends, and leaves Australia in a position to negotiate down the track – which the White House is open to doing. Other countries weren't so lucky. New Zealand's tariff was hiked to 15 per cent, from 10 per cent, which its trade minister, Todd McClay, said appeared to be due to the (small) US trade deficit with Wellington. The US enjoys a trade surplus with Australia, and we have a free-trade deal (supposedly), which is why Canberra feels the tariffs are egregious. But it also means we were never likely to be whacked with a higher tariff, unless everyone else was, too.
