US to impose new tariff rates as Trump shifts trade strategy

Khaleej Times

4 days ago

President Donald Trump said Washington will start sending letters to countries on July 4 specifying what tariff rates they will face on imports to the US, a clear shift from earlier pledges to strike scores of individual deals.
Acknowledging the complexity of negotiating with over 170 nations, Trump told reporters before departing for Iowa on July 3 that the letters will be sent to 10 countries at a time, laying out tariff rates such as 20 per cent to 30 per cent.
"We have more than 170 countries, and how many deals can you make?" Trump said. "They're very much more complicated."
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The Republican president said he expected "a couple" more detailed agreements with other countries after Wednesday's announcement of a trade deal with Vietnam.
However, he said he preferred to notify most other countries of a specific tariff rate, skipping detailed negotiations.
Trump's comments underscored the challenges of completing trade agreements on everything from tariffs to non-tariff barriers such as bans on agricultural imports.
Top Trump aides said in April they would work on 90 deals in 90 days, an ambitious goal that was met with skepticism from trade experts familiar with arduous and time-consuming trade deals of the past.
Treasury Secretary Scott Bessent told Bloomberg Television that about 100 countries are likely to see a reciprocal tariff rate of 10 per cent and predicted a "flurry" of trade deals announced before a July 9 deadline when tariffs could rise sharply.
If 10 per cent tariffs were given to 100 countries, that would be fewer than originally envisioned by the Trump administration.
Its original reciprocal tariff list showed 123 jurisdictions that would be given a 10 per cent tariff rate — mostly small countries — along with some territories such as Australia's uninhabited Heard and McDonald Islands.
Trump sent markets into a tailspin on April 2 with sweeping reciprocal tariff rates ranging from 10 per cent to 50 per cent, although he temporarily reduced the tariff rate for most countries to 10 per cent to allow time for negotiations through July 9.
Many countries with an initial 10 per cent duty rate have not had any negotiations with the Trump administration, with the exception of Britain, which reached a deal in May to keep a 10 per cent rate and won preferential treatment for some sectors including autos and aircraft engines.
Major trading partners now involved in negotiations were hit with much higher tariff rates, including 20 per cent for the European Union, 26 per cent for India and 24 per cent for Japan. Other countries that have not engaged in trade talks with the Trump administration face even higher reciprocal tariffs, including 50 per cent for the tiny mountain kingdom of Lesotho, 47 per cent for Madagascar and 36 per cent for Thailand.
Trump on Wednesday announced an agreement with Vietnam that he said cuts US tariffs on many Vietnamese goods to 20 per cent from his previously threatened 46 per cent. Many US products would be allowed to enter Vietnam duty free.