Latest news with #tradeimbalance
Al Jazeera
09-07-2025
- Business
- Al Jazeera
Trump announces new tariffs on six countries including Iraq and the Philippines
US President Donald Trump has issued a new round of tariff letters to six countries, including Algeria, Brunei, Iraq, Libya, Moldova and the Philippines. The letters, which were sent on Wednesday, call for tariffs of 30 percent on Algeria and Iraq; 25 percent on Brunei, Libya and Moldova; 20 percent on the Philippines – the largest of the trading partners announced on Wednesday. The tariffs are expected to start on August 1. Trump posted the letters on Truth Social after the expiration of a 90-day negotiating period that began with a baseline levy of 10 percent. Trump is giving countries more time to negotiate before his August 1 deadline, but he has insisted there will be no extensions for the countries that receive letters. The Census Bureau reported that last year, the US ran a trade imbalance on goods of $1.4bn with Algeria, $5.9bn with Iraq, $900m with Libya, $4.9bn with the Philippines, $111m with Brunei and $85m with Moldova. The imbalance represents the difference between what the US exported to those countries and what it imported. None of the countries listed are major industrial rivals to the United States. Taken together, the trade imbalances with those six countries are essentially a rounding error in a US economy with a gross domestic product (GDP) of $30 trillion. Wednesday's letters are the latest in a slate the Trump Administration sent to nations around the globe. On Monday, he threatened Japan and South Korea with 25 percent tariffs, stepping up pressure on the two historical US allies and a dozen other economies to reach trade deals with Washington. Over the weekend, the Trump administration began sending letters to countries informing them that the US would begin to reimpose the tariffs it postponed in April. Trump's erratic approach to tariffs is triggering widespread economic effects on the US and countries around the world. In the US, the most recent jobs report showed little to no growth in sectors including trade and construction, industries largely impacted by tariffs. The US GDP contracted 0.5 percent in the first quarter of the year, according to data released by the US Department of Commerce's report last month. This comes amid a handful of looming trade negotiations across the globe that will impact the US economy and many of its key trade partners. The Trump administration has only put forth two trade agreements thus far, which are with the United Kingdom and Vietnam. US markets have stayed stable despite the new tariffs. As of 12:30pm Eastern Time (16:30 GMT), the Nasdaq is up 0.5 percent. The S&P 500 is about even with the market open, only up about 0.2 percent, and the Dow Jones Industrial Average is up by 0.1 percent.
Mail & Guardian
09-07-2025
- Business
- Mail & Guardian
US tariffs on local exports could slash growth, economists warn
US President Donald Trump said this week that the tariff is meant to address the trade imbalance between South Africa and the US. (Photo: Evan Vucci/AP/picture alliance) Economists have said that South Africa's South Africa is one of 14 countries that have received formal communication from the US regarding proposed tariff increases. Trump first announced the tariffs in In his latest communication to South Africa, Trump said: 'Our relationship has been, unfortunately, far from reciprocal. Starting on August 1, 2025, we will charge South Africa a tariff of only 30% on any and all South African products sent to the United States, separate from all sectoral tariffs.' The South African government said the 30% tariff is based on a particular interpretation of the balance of trade between South Africa and the US, and it would try to negotiate better terms with Washington. 'This contested interpretation forms part of the issues under consideration by the negotiating teams from South Africa and the United States. Accordingly, South Africa maintains that the 30% reciprocal tariff is not an accurate representation of available trade data,' Vincent Magwenya, the presidency spokesperson, said in a statement. 'In our interpretation of the available trade data, the average tariff on imported goods entering South Africa stands at 7.6%. Importantly, 56% of goods enter South Africa at 0% most favoured nation tariff, with 77% of US goods entering the South African market under the 0% duty. South Africa's single biggest exports to the US are mining ores and metals, followed by machinery and transport equipment and vehicles. George Herman, the chief investment officer at Citadel, said that although the full details of how the new tariffs are going to be imposed or where exemptions are going to be applied were not made public,'the automotive, wine and South Africa's Standard Bank had expected the economy to grow by nearly 2% this year, but problems ranging from the initial tariff hikes and the associated policy uncertainty to weather disruptions such as floods and struggles earlier this year in passing the budget have seen it trim this to just more than 1%, said Elna Moolman, the bank's head of macroeconomic research. 'Should the 30% tariff hikes on South African exports to the United States be implemented, even 1% would be hard to reach and it could, depending on the extent of any exemptions, even negate the growth improvement that is widely expected from last year's weak growth,' she said. Based on rough estimates from existing export volumes to the US, a reduction in trade could cut South Africa's GDP growth by up to 0.5%, Citadel's Herman said. 'With the economy already forecast to grow by only about 1% this year, this would represent a significant blow. 'From a financial market perspective, risk premiums have largely been priced out, as investors anticipate that interest rate cuts will help cushion the impact. However, this optimism may be misplaced,' he said. 'Persistent economic headwinds and the compounding effect of elevated tariffs could dampen global growth and create a more difficult environment in the months ahead.' Presidency spokesperson Magwenya said: 'South Africa will continue with its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States. We welcome the commitment by the US government that the 30% tariff is subject to modification at the back of the conclusion of our negotiations with the United States.' President Cyril Ramaphosa has called on government trade negotiations teams and South African companies to diversify trade relations to promote better resilience in both global supply chains and the local economy. But economists say more reforms are needed to boost the economy, including policy intervention. 'In our view, while 2025 growth will be weaker than originally envisaged owing to a range of headwinds, including US tariffs on SA and other countries' exports, trend growth should ultimately still improve if policy reforms continue,' Standard Bank's Moolman said.
Zawya
09-07-2025
- Business
- Zawya
South Africa says Trump relying on ‘contested' data to raise tariffs
South Africa says the US is using 'contested' data on trade to raise tariffs Pretoria argues will unfairly punish the country. In response to President Donald Trump's decision to re-impose higher taxes on South African exports, President Cyril Ramaphosa's office said the two sides must sit down to assess actual data on trade to avoid misinterpreting facts. Trump announced on Monday that he will impose a new 30 percent tariff on imports from South Africa, to take effect on August 1. Trump argued that the trade imbalance favours South Africa because it imposes tariffs on US goods while enjoying privileges under the expiring Africa Growth Opportunity Act (Agoa). 'This 30 percent tariff is based on a particular interpretation of the balance of trade between South Africa and the United States. This contested interpretation forms part of the issues under consideration by the negotiating teams from South Africa and the United States,' said Ramaphosa's spokesperson, Vincent Magwenya.'Accordingly, South Africa maintains that the 30 percent reciprocal tariff is not an accurate representation of available trade data. According to our interpretation of the available trade data, the average tariff on imported goods entering South Africa is 7.6 percent.'In a letter addressed to President Ramaphosa, Trump said: 'We have had years to discuss our trading relationship with South Africa, and have concluded that we must move away from these long-term, and very persistent, trade deficits engendered by South Africa's tariff, and non-tariff, policies and trade barriers.'Our relationship has been, unfortunately, far from reciprocal. Starting on August 1, 2025, we will charge South Africa a tariff of only 30 percent on any and all South African products sent to the United States, separate from all sectoral tariffs.'South Africa, however, argues, 56 percent of goods enter South Africa at zero percent most favoured nation tariff, with 77 percent of US goods entering the South African market under the zero percent duty. Under the World Trade Organisation rules, countries are encouraged to treat trading partners the same way when it comes to trading on common items. The presidency in Pretoria clarified that South Africa remains committed to fostering closer trade relations with the United States in their ongoing negotiations. This deal addresses issues raised by the US, including South Africa's alleged trade surplus, unfair trade practices, and lack of reciprocity.'South Africa will continue with its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States. We welcome the commitment by the US government that the 30 percent tariff is subject to modification at the back of the conclusion of our negotiations with the United States,' said Mr Magwenya. Meanwhile, President Trump stated that if South Africa were to implement higher tariffs in response to his announcement, the additional tariffs would be added on top of the existing 30 percent. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Washington Post
08-07-2025
- Business
- Washington Post
The Latest: Trump delays tariff implementation another month
President Donald Trump 's latest executive order delaying official tariff increases on dozens of countries until Aug. 1 has relieved some pressure on world markets , but he also ordered a 25% tax on goods imported from Japan and South Korea , citing persistent trade imbalances with the two crucial U.S. allies in Asia.
Fast Company
07-07-2025
- Business
- Fast Company
Trump sets 25% tariffs on imports from Japan and South Korea
President Donald Trump on Monday placed a 25% tax on goods imported from Japan and South Korea, citing persistent trade imbalances with the two crucial U.S. allies in Asia. Trump provided notice of the tariffs to begin on Aug. 1 by posting letters on Truth Social that were addressed to the leaders of both countries. The letters warned both countries to not retaliate by increasing their own import taxes, or else the Trump administration would further increase tariffs. 'If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge,' Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung. The letters were not the final word from Trump on tariffs, so much as another episode in a global economic drama in which the U.S. president has placed himself at the center. His moves have raised fears that economic growth will slow to a muddle, if not make the U.S. and other nations more vulnerable to a recession. But Trump is confident that tariffs are necessary to bring back domestic manufacturing and fund the tax cuts he signed into law last Friday. The S&P 500 stock index was down nearly 1% in Monday afternoon trading, while the interest charged on the 10-year U.S. Treasury noted had increased to nearly 4.39%, a figure that could translate into elevated rates for mortgages and auto loans. Trump has declared an economic emergency to unilaterally impose the taxes, suggesting they are remedies for past trade deficits even though many U.S. consumers have come to value autos, electronics and other goods from Japan and South Korea. But it's unclear what he gains strategically against China—another stated reason for the tariffs—by challenging two crucial partners in Asia who could counter China's economic heft. 'These tariffs may be modified, upward or downward, depending on our relationship with your Country,' Trump wrote in both letters. Because the new tariff rates go into effect in roughly three weeks, Trump is setting up a period of possibly tempestuous talks among the U.S. and its trade partners to reach new frameworks. Trump initially sparked hysteria in the financial markets by announcing tariff rates on dozens of countries, including 24% on Japan and 25% on South Korea. In order to calm the markets, Trump unveiled a 90-day negotiating period during which goods from most countries were taxed at a baseline 10%. The 90-day negotiating period technically ends before Wednesday, even as multiple administration officials and Trump himself suggested the three-week period before implementation is akin to overtime for additional talks. Administration officials have said Trump is relying on tariff revenues to help offset the tax cuts he signed into law on July 4, a move that could shift a greater share of the federal tax burden onto the middle class and poor as importers would likely pass along much of the cost of the tariffs. Trump has warned major retailers such as Walmart to simply 'eat' the higher costs, instead of increasing prices in ways that could intensify inflation. Trump's team promised 90 deals in 90 days, but his negotiations so far have produced only two trade frameworks. His trade framework with Vietnam was clearly designed to box out China from routing its America-bound goods through that country, by doubling the 20% tariff charged on Vietnamese imports on anything traded transnationally. The quotas in the United Kingdom framework would spare that nation from the higher tariff rates being charged on steel, aluminum and autos, still British goods would generally face a 10% tariff. The United States ran a $69.4 billion trade imbalance in goods with Japan in 2024 and a $66 billion imbalance with South Korea, according to the Census Bureau. According to Trump's letters, autos would be tariffed separately at the standard 25% worldwide, while steel and aluminum imports would be taxed on 50%. The broader 25% rates on Japan and South Korea would apply to goods not already covered by the specific sectoral tariffs. This is not the first time that Trump has tangled with Japan and South Korea on trade—and the new tariffs suggest his past deals made during his first term failed to deliver on his administration's own hype. In 2018, during Trump's first term, his administration celebrated a revamped trade agreement with South Korea as a major win. And in 2019, Trump signed a limited agreement with Japan on agricultural products and digital trade that at the time he called a 'huge victory for America's farmers, ranchers and growers.'
