US and Japan strike trade deal, avoiding Trump's threat of 25% tariffs
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After months of negotiations, the US has reached a trade deal with Japan. US President Donald Trump celebrated the agreement on tariffs in a social media post, while Japan's Prime Minister Shigeru Ishiba hailed the deal, which sets duties on Japanese exports to the US at a rate of 15 percent. In this edition, we look at what exactly has been announced by both sides and what it means for Japan's auto sector, which is responsible for a quarter of all exports to the US.
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France 24
an hour ago
- France 24
State of play in Trump's tariffs, threats and delays
Here is a summary of duties President Donald Trump has introduced in his second term as he pressures allies and competitors alike to reshape US trade relationships. Global tariffs US "reciprocal" tariffs -- imposed under legally contentious emergency powers -- are due to jump from 10 percent to various steeper levels for a list of dozens of economies come August 1, including South Korea, India and Taiwan. The hikes were to take effect July 9 but Trump postponed them days before imposition, marking a second delay since their shock unveiling in April. A 10 percent "baseline" levy on most partners, which Trump imposed in April, remains in place. He has also issued letters dictating tariff rates above 10 percent for individual countries, including Brazil, which has a trade deficit with the United States and was not on the initial list of higher "reciprocal" rates. Several economies -- the European Union, Britain, Vietnam, Japan, Indonesia and the Philippines -- have struck initial tariff deals with Washington, while China managed to temporarily lower tit-for-tat duties. Certain products like pharmaceuticals, semiconductors and lumber are excluded from Trump's "reciprocal" tariffs, but may face separate action under different authorities. This has been the case for steel, aluminum, and soon copper. Gold and silver, alongside energy commodities, are also exempted. Excluded too are Mexico and Canada, hit with a different set of tariffs, and countries like Russia and North Korea as they already face sanctions. Canada, Mexico Canadian and Mexican products were hit by 25 percent US tariffs shortly after Trump returned to office, with a lower rate for Canadian energy. Trump targeted both neighbors over illegal immigration and fentanyl trafficking, also invoking emergency powers. But trade negotiations have been bumpy. This month, Trump said Canadian goods will face a higher 35 percent duty from August 1, and Mexican goods will see a 30 percent level. Products entering the United States under the USMCA North American free trade pact, covering large swaths of goods, are expected to remain exempt -- with Canadian energy resources and potash, used as fertilizer, to still face lower rates. China focus Trump has also taken special aim at China. The world's two biggest economies engaged in an escalating tariffs war this year before their temporary pullback. The countries imposed triple-digit duties on each other at one point, a level described as a trade embargo. After high level talks, Washington lowered its levies on Chinese goods to 30 percent and Beijing slashed its own to 10 percent. This pause is set to expire August 12, and officials will meet for further talks on Monday and Tuesday in the Swedish capital Stockholm. The US level is higher as it includes a 20 percent tariff over China's alleged role in the global fentanyl trade. Beyond expansive tariffs on Chinese products, Trump ordered the closure of a duty-free exemption for low-value parcels from the country. This adds to the cost of importing items like clothing and small electronics. Autos, metals Trump has targeted individual business sectors too, under more conventional national security grounds, imposing a 25 percent levy on steel and aluminum imports which he later doubled to 50 percent. The president has unveiled plans for a 50 percent tariff on copper imports starting August 1 as well and rolled out a 25 percent tariff on imported autos, although those entering under the USMCA can qualify for a lower rate. Trump's auto tariffs impact vehicle parts too, but new rules ensure automakers paying vehicle tariffs will not also be charged for certain other duties. He has ongoing investigations into imports of lumber, semiconductors, pharmaceuticals and critical minerals that could trigger further duties. Legal challenges Several legal challenges have been filed against the tariffs Trump invoked citing emergencies. The US Court of International Trade ruled in May that the president had overstepped his authority, but a federal appeals court has allowed the duties to remain while it considers the case. If these tariffs are ultimately ruled illegal, companies could possibly seek reimbursements. © 2025 AFP
France 24
an hour ago
- France 24
What is the status of US tariff negotiations?
Many of these tariff hikes were part of a package first announced in April, under which dozens of economies were due to face higher levies -- up from a 10 percent level -- over their trade surpluses with the United States. The twice-postponed deadline for duties to take effect is now Friday, August 1. But Washington has expanded its group of targets coming up against these tariffs, while announcing agreements with the European Union, Britain, Vietnam, Japan, Indonesia and the Philippines. A deal with the European Union unveiled on Sunday sees a 15 percent tariff imposed on European exports to the United States, down from the 30 percent that Trump earlier threatened. Where do other US trade talks stand? South Korea: Heightened pressure Seoul is racing to reach a deal with Washington, as Tokyo's success in landing an agreement has "amped up the pressure for South Korea," a government source told AFP. Local media reported that Seoul was preparing to propose more than $100 billion in investment as part of a broader agreement, with expected participation by major firms such as Samsung and Hyundai Motor. The South Korean government did not confirm this. But South Korean officials have outlined proposals to deepen collaboration in sectors like shipbuilding, semiconductors and batteries. National Security Advisor Wi Sung-lak has told reporters that the two countries are in "the final and most crucial phase of negotiations" to avert Trump's proposed 25 percent duty. India: Cautious optimism Indian Commerce Minister Piyush Goyal told Bloomberg Television Thursday that he was optimistic his country could reach an agreement with the United States to avert Washington's 26 percent tariff threat. Goyal insisted there were not any sticking points in the US-India relationship or in trade talks, and clarified that immigration rules —- including those around H-1B visas for skilled workers -- had not come up in negotiations. Despite Goyal's remarks, local media reported the prospects of an interim deal before August 1 had dimmed. Taiwan: Working hard Taiwanese Premier Cho Jung-tai said Thursday that officials are "working hard" on negotiations, amid worries that an unfavorable tariff level could hit the self-ruled island's economy. Vice President Hsiao Bi-khim said Taipei's negotiating team was "working almost 24 hours a day to achieve trade balance and Taiwan's industrial interests, and even to further deepen cooperation." Canada, Mexico: Deal unclear Although Canada and Mexico were spared from Trump's "reciprocal" tariffs announced in April, goods from both countries entering the United States generally face a separate 25 percent duty if they fall outside a North American trade pact. This figure stands to jump to 30 percent for Mexico come August 1, while the level for Canada was set at 35 percent. Mexican President Claudia Sheinbaum said her administration was "doing everything" possible to avert the duties and that she would speak with Trump if necessary to try to reach a pact. Trump told reporters Friday there was no deal with Canada so far. Brazil: Political nature Brazil is girding for a virtual trade embargo on its planes, grains and other goods if Trump's threatened 50 percent tariff on its exports takes effect on August 1. The United States runs a trade surplus with Latin America's biggest economy, which was not originally expected to face steeper tariffs under Trump's "reciprocal" duties plan. Trump has not attempted to hide the political motivation in targeting Brazil, citing a judicial "witch hunt" against his right-wing ally, former president Jair Bolsonaro, when he unveiled the tariff rate. The political nature of the spat makes a last-minute deal appear less likely. burs-jug-bys/sst © 2025 AFP
France 24
an hour ago
- France 24
US-China set to meet with extension of tariff pause on the cards
Talks between the world's top two economies are slated to happen over two days in the Swedish capital Stockholm, and they come as other countries are also rushing to finalise deals with Washington. For dozens of trading partners, failing to strike an agreement in the coming days means they could face significant tariff hikes on exports to the United States come Friday, August 1. The steeper rates, threatened against partners like Brazil and India, would raise the duties their products face from a "baseline" of 10 percent now to levels up to 50 percent. Tariffs imposed by the Trump administration have already effectively raised duties on US imports to levels not seen since the 1930s, according to data from The Budget Lab research centre at Yale University. For now, all eyes are on discussions between Washington and Beijing as a delegation including US Treasury Secretary Scott Bessent meets a Chinese team led by Vice Premier He Lifeng in Sweden. While both countries in April imposed tariffs on each other's products that reached triple-digit levels, US duties this year have temporarily been lowered to 30 percent and China's countermeasures slashed to 10 percent. But the 90-day truce, instituted after talks in Geneva in May, is set to expire on August 12. Since the Geneva meeting, the two sides have convened in London to iron out disagreements. China progress? "There seems to have been a fairly significant shift in (US) administration thinking on China since particularly the London talks," said Emily Benson, head of strategy at Minerva Technology Futures. "The mood now is much more focused on what's possible to achieve, on warming relations where possible and restraining any factors that could increase tensions," she told AFP. Talks with China have not produced a deal but Benson said both countries have made progress, with certain rare earth and semiconductor flows restarting. "Secretary Bessent has also signalled that he thinks a concrete outcome will be to delay the 90-day tariff pause," she said. "That's also promising, because it indicates that something potentially more substantive is on the horizon." The South China Morning Post, citing sources on both sides, reported Sunday that Washington and Beijing are expected to extend their tariff pause by another 90 days. Trump has announced pacts so far with the European Union, Britain, Vietnam, Japan, Indonesia and the Philippines, although details have been sparse. An extension of the US-China deal to keep tariffs at reduced levels "would show that both sides see value in continuing talks", said Thibault Denamiel, a fellow at the Centre for Strategic and International Studies. US-China Business Council President Sean Stein said the market is not anticipating a detailed readout from Stockholm: "What's more important is the atmosphere coming out." "The business community is optimistic that the two presidents will meet later this year, hopefully in Beijing," he told AFP. "It's clear that on both sides, the final decision-maker is going to be the president." Sweden's Prime Minister Ulf Kristersson said both countries' willingness to meet was a "positive development". Far from ideal For others, the prospect of higher US tariffs and few details from fresh trade deals mark "a far cry from the ideal scenario", said Denamiel. But they show some progress, particularly with partners Washington has signalled are on its priority list like the EU, Japan, the Philippines and South Korea. The EU unveiled a pact with Washington on Sunday while Seoul is rushing to strike an agreement, after Japan and the Philippines already reached the outlines of deals. Breakthroughs have been patchy since Washington promised a flurry of agreements after unveiling, and then swiftly postponing, tariff hikes targeting dozens of economies in April. Denamiel warned of overlooking countries that fall outside Washington's priority list. Solid partnerships are needed, he said, if Washington wants to diversify supply chains, enforce advanced technology controls, and tackle excess Chinese capacity. © 2025 AFP
