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Straits Times
7 hours ago
- Business
- Straits Times
Explainer-How do the US trade deals reached by the EU and UK compare?
U.S. President Donald Trump shakes hands with European Commission President Ursula von der Leyen, as U.S. Commerce Secretary Howard Lutnick, Trade Representative Jamieson Greer and White House Deputy Chief of Staff Stephen Miller clap, after an announcement of a trade deal between the U.S. and EU, in Turnberry, Scotland, Britain, July 27, 2025. REUTERS/Evelyn Hockstein REFILE - QUALITY REPEAT LONDON - The European Union and the United States announced a tariff deal on Sunday that will see most EU exports face a 15% tariff, nearly three months after Britain locked in a 10% baseline tariff rate. EU leaders have said their deal offers more certainty given the threat of higher U.S. tariffs from August but some politicians have criticised it as "unbalanced" and worse than Britain's deal. The details of the two deals paint a more complicated picture than the headline figures suggest, and not all the small print of the EU deal has been confirmed. Here is a comparison of what we know about the two deals. BASELINE TARIFFS The EU has agreed a 15% baseline tariff for most of its exports to the United States. While this is lower than a rate of up to 30% previously threatened by U.S. President Donald Trump, it is higher than the baseline tariff rate of 10% which applies to British exports. However, under the EU deal, 15% is the maximum tariff, and isn't added to any existing rate. For Britain, the 10% base rate is in addition to the "most-favoured nation" (MFN) rates that the U.S. applies as a minimum to specific goods imports from all its trade partners, so the effective tariff rate is often higher. Top stories Swipe. Select. Stay informed. Asia Cambodia, Thailand agree to 'immediate and unconditional ceasefire' to de-escalate border row Singapore Tanjong Katong sinkhole: Road recovery works progressing steadily, tests under way Singapore ST Explains: What we know about the Tanjong Katong sinkhole so far Singapore Foreign workers who rescued woman from sinkhole given tokens of appreciation Asia Gunman kills 5 near Bangkok's Chatuchak market before taking own life Business SIA Q1 profit falls 59%; airline group sees volatile times ahead Singapore Man exposed daughter's identity despite court order after she was removed from his care Singapore Over 6 years' jail for conman who cheated 13 victims of more than $1.2m For instance, the UK Fashion and Textile Association has highlighted that certain luxury products face an MFN tariff of around 35% in the U.S., despite a "baseline" rate of only 10%. PHARMACEUTICALS The U.S. is to announce the result of its so-called Section 232 trade investigations into certain sectors in a few weeks and decide on tariff rates. The EU-U.S. deal already determines a 15% tariff for European pharmaceuticals, and the results of the investigations will not change that, U.S. officials said. In its deal with Britain, the United States said it would negotiate "significantly preferential treatment outcomes on pharmaceuticals", contingent on the outcome of the 232 investigations. Asked if Britain would be impacted by tariffs on the pharma sector in August, Trump said that he could deal with Britain on pharma and he didn't think the sector would be a "block" in talks. In the meantime Britain faces no tariffs for its pharmaceuticals. Britain also pledged to try to improve the overall environment for pharma firms operating in the country, but it is tussling with multinationals over drug pricing. STEEL Tariffs on EU steel and aluminium exports will stay at 50%, but von der Leyen said these would later be cut and replaced by a quota system. British steel and aluminium exports face a 25% tariff in the United States, which both sides have agreed will go down to zero once talks over quotas and supply chains are concluded. Those talks have stalled over "melted and poured" rules about where the steel originates and how it is processed. Britain's Tata Steel has imported steel from India and the Netherlands after shutting blast furnaces last year, so Britain is seeking an exemption from a U.S. demand that steel needs to be "melted and poured" in Britain to qualify for lower tariffs. AUTOS Car exports from the EU to the U.S. face the baseline tariff of 15% in the deal struck on Sunday. While full details have not been published, neither side mentioned a quota for the number of cars covered by the rate. Britain has negotiated a lower tariff of 10% for its car sector but it also has a 100,000-vehicle quota which leaves little room for export growth. Above that quota, British car exports face a tariff of 25%. AEROSPACE The EU will face no U.S. tariffs on aerospace exports, pending the outcome of a Section 232 probe into the sector. Britain also has no tariffs on its aerospace sector after its deal with Washington reduced them from 10%. REUTERS
Euronews
8 hours ago
- Business
- Euronews
EU-US trade deal leaves future of pharma tariffs uncertain
The current status of tariffs on pharmaceuticals between the EU and the US remains uncertain, despite the announcement on Sunday of a new transatlantic trade agreement. The situation is particularly sensitive given the mutual dependency in the sector: the US imports large volumes of critical pharmaceuticals from the EU, while EU-based pharmaceutical companies—especially in Ireland and Denmark—rely heavily on access to the American market. Although the new trade agreement will officially enter into force on 1 August, pharmaceuticals will not be subject to a 15% tariff which will be slapped on most goods imported from the European Union to the United States. This does not mean that there won't be tariffs at all on pharmaceuticals, as the US is still conducting an investigation into imported pharmaceuticals to assess whether they threaten US national security. For this reason, pharmaceuticals were technically excluded from yesterday's formal agreement, several EU sources confirm, as the US could not commit to any decision on tariff changes, which will only come after the conclusion of that process. However, if tariffs are introduced following the investigation, the EU expects the US—under President Trump—to honour the informal understanding reached during negotiations. This includes a cap of 15% on tariffs, which the EU considers "all-inclusive", meaning it should apply even to products still under investigation, such as pharmaceuticals and semiconductors. 'I believe that this commitment will be honoured and respected in this case as well,' said EU Trade Commissioner Maroš Šefčovič during a press briefing following the deal. So, what happens after 1 August? In the short term, nothing will change. Despite earlier reports suggesting the US would impose a 15% tariff on pharmaceuticals too in line with most EU goods, that is not expected to happen immediately. 'There will be no tariffs on pharmaceuticals this Friday,' clarified a senior EU official who participated in the negotiations with President Trump in Scotland. Most pharmaceutical products traded between the EU and the US currently benefit from a 0% tariff rate under the Most-Favoured Nation (MFN) framework. This is consistent with prior US-EU trade arrangements and World Trade Organization (WTO) commitments. As a result, EU pharmaceutical exports have faced no tariff barriers when entering the US market—a condition that remained unchanged even after Trump's so-called "Liberation Day", when he announced imposing blanket tariffs on goods. Uncertain outcome of the US investigation But tariffs on pharmaceuticals are expected to come at one point. The key uncertainty revolves around the ongoing Section 232 investigation being conducted by the Trump administration. This probe, authorised under the Trade Expansion Act of 1962, is intended to assess whether imports of pharmaceuticals (and other products as well such as semiconductors) threaten US national security. The investigation's conclusions could lead to unilateral actions by the US, including higher tariffs or import restrictions, independent of the broader trade deal struck yesterday. '[During the talks] President Trump wanted to make clear that they still have full freedom to conclude the 232 investigations and to choose any policy measures as a result,' said another EU negotiator. While EU officials cannot predict the outcome of the US investigation, they believe it is nearing completion. 'These are two investigations—pharmaceuticals and semiconductors—that are pretty close to conclusion,' an official noted. If the US does impose tariffs following the investigation, the EU expects these to be capped at 15% for both sectors, in line with the political understanding reached during the trade talks. EU's bet on pharma tariffs The EU's strategy is clear: even though Trump could not legally commit yesterday to tariffs on pharmaceuticals while the investigation is ongoing, the EU insisted on a 15% ceiling across all sectors, with no exclusions for pharmaceuticals. A senior EU official added that this understanding is backed by a broader political commitment, including planned investments by pharmaceutical companies in the US and pressure from the industry on both sides of the Atlantic to collaborate more closely. 'There is a clear understanding that investments, supply chain integration, and joint R&D efforts should all fall under the special 15% regime,' the official explained. Still, the EU acknowledges that this is not yet a legally binding commitment. 'Is this a legal commitment? No, not at this stage. That would have to come through an executive order once the US concludes its investigation,' the source continued. For now, both pharmaceutical and semiconductor products remain at zero-duty 0rates. No changes will occur on 1 August, but that could change once the US finalises its Section 232 investigation.
New Indian Express
2 days ago
- Business
- New Indian Express
India-UK FTA allows India to temporarily hike tariff if UK imports surge
The recently signed Free Trade Agreement (FTA) between India and the United Kingdom has safeguard measures, which allow India to temporarily increase tariffs or suspend existing tariff concessions on certain goods if a significant surge in imports from the UK threatens or causes serious injury to local industries, according to the ministry of Commerce. This mechanism is a key component of India's cautious approach to trade liberalisation, ensuring that the opening of markets does not unduly harm domestic producers. It provides a safety net against unforeseen import surges that could destabilize sensitive sectors, says an official. The trigger for invoking these safeguards is clearly defined in the trade agreement - a rise in the absolute quantities of an originating good from the UK, or an increase relative to domestic production, directly resulting from the FTA's tariff concessions, and subsequently causing or threatening serious injury to a domestic industry. Under these measures, India has the authority to either suspend further duty reductions or even increase duties. However, there are limitations to taking such actions. The increased duty cannot exceed the lesser of the current Most Favoured Nation (MFN) applied rate or the pre-agreement MFN applied rate. This ensures that while protection is provided, it remains within reasonable bounds. The duration of such safeguard measures is initially set at up to two years. This period can be extended for an additional two years, bringing the total maximum duration to four years, provided a thorough investigation determines that the safeguard remains necessary to prevent or remedy serious injury and to facilitate the domestic industry's adjustment. Notably, the right to apply these bilateral safeguard measures extends for a significant "transition period" of 14 years after tariff elimination on the respective goods. This long applicability period offers sustained protection as industries adapt to the new competitive landscape.
NDTV
3 days ago
- Business
- NDTV
Trade Deals vs WTO: Is Trump Hastening The World Trade Organization's Demise?
The World Trade Organization (WTO) is a key institution of global governance that was founded in 1995 as a successor to the General Agreements on Tariffs and Trade (GATT), established in the wake of World War II. The period just before the Second World War was an era of protectionism that saw high tariffs imposed by the US, and the GATT was signed by 23 countries in 1947 to tackle the tariff barriers and facilitate international trade. The current Trump tariffs may not be mimicking the pre-WWII period, but they are certainly reminiscent of that. The world has witnessed the impact of the Smoot-Hawley Tariff Act of the 1930s. So, the question that arises is, why would US President Donald Trump tread a similar path a century later? There is a growing viewpoint that the Trump administration is using tariffs as a negotiating tool to pressure countries to strike bilateral trade deals with the United States. While sovereign nations are free to decide what works in their interest, America's stress on bilateral deals is a more nuanced move. At the heart of this move is a strategic shift that risks rendering the World Trade Organization irrelevant. This is because one of the basic principles of the WTO is non-discrimination - Most Favoured Nation (MFN) and National Treatment (NT). That means member countries need to extend similar concessions to all members in the WTO. So, if President Trump strikes trade deals with a few countries and drops the tariffs for them, for example, on steel and aluminum, while continuing with high tariffs for some other countries, it would be flouting the WTO principle. In essence, any preferential treatment emerging from the deals would undermine the MFN concept - even though the cover that the US could use is one of the two exceptions under MFN - that Free Trade Agreements are valid if they are comprehensive. Political scientists like Timothy Sinclair, Margaret Karns, and Karen Mingst stress that the power of a high-profile subset of key intergovernmental organizations - like WTO - rests on mutual benefits from conformity to the system. The US is clearly deviating from conforming to a system of which it was at the forefront of building. At this moment, it appears that President Trump is the executioner-in-chief of this strategy of deviation; however, one of the first steps towards weakening the WTO was taken during the Obama administration and later followed up by the first Trump administration. The Dispute Settlement System (DSS), a vital organ of the trading system, is being virtually strangled due to a lack of quorum in its Appellate Body (AB). Through three US administrations, starting with President Barack Obama's, Washington has accused the WTO's Appellate Body of overstepping its boundaries, making new trade rules in its decisions that were not negotiated by the WTO's 166 member economies. In 2016, the US blocked the reappointment of a South Korean judge to the Appellate Body. In 2018, the Trump administration blocked the reappointment of two other judges, rendering the Appellate Body non-functional. Conservative US think tanks have alleged bias by judges in the Appellate Body, demanding that the US completely withdraw from the WTO. A write-up in the Heritage Foundation by Andrew Hale in March 2024 said that judges had repeatedly shown bias against the US and in favour of their home countries. 'These biased judges have ruled against the US at least partially in 90% of cases, and the US became the most sued-against country at the WTO, despite the fact that we arguably have the freest trade system in the world.' This is not just the Conservative viewpoint, it seems to have bipartisan support despite not being entirely rooted in reality. Late last year, the then-outgoing American ambassador to the WTO, Maria Pagan, had warned that if the world wanted the US to be part of the international rules-based trading system, then it should 'take us seriously". The United States, which had emerged as the strongest economy after World War II, was the driving force in the international trade regime back in the day. 'Nothing of consequence was achieved without US leadership. Today, this is no longer the case,' said Keith M. Rockwell in Postcard From A Disintegration: Inside the WTO's Fraying Seams. The US is now the world's second-largest trading nation, pushed behind China. Rockwell believes that the Cold War mentality gripping Washington stems from its anxiety over China. The US believes 'China has somehow rigged the multilateral trading system, shirked its responsibilities, and gamed the dispute settlement function". Hence, it appears that the US stand on the Appellate Body is either to destabilise the WTO leading to its demise or to use it as a lever to negotiate on its terms on contentious issues like self-designation of developing countries, agricultural subsidies and Trade Related Intellectual Property Rights Agreement (TRIPS) - all of which have seen a pushback from the Global South in the past. In an article titled The Global South in the WTO: Time to Go on the Offensive, published by Foreign Policy in Focus, Walden Bello says that as resistance by developing countries under the leadership of India, Brazil, and China to attempted restrictive moves of the US in the WTO grew, 'the United States began to move away from a strategy of multilateral trade liberalization via the WTO". In fact, Professor and Canada Research Chair in Global Policy, Kristen Hopewell, wrote in 2023 that China and India formed a surprising alliance at the WTO that has been highly successful in bringing an end to American dominance and sharply curtailing the ability of the US to set the rules of global trade, which has resulted in a 'vertical forum shifting' by the dominant power; it is now at the brink of abandoning the WTO and pursuing bilateral trade more actively. This is underway with President Trump's multiple trade deal dialogues currently - from India to Canada and Indonesia. The US has trade relations with more than 200 countries, territories, and regional associations around the globe. With over $7.0 trillion in exports and imports of goods and services in 2022, per the Office of the US Trade Representative, the significance of the US participation in a rules-based trading system cannot be overstated. But with nations being compelled to seal bilateral deals with the US in a hurry, they may end up collectively helping the US write the WTO's epitaph.
Time of India
5 days ago
- Business
- Time of India
‘Aggressive US pressure can force…': GTRI warns India against one-sided trade deal; says don't fall into same trap' as Indonesia
GTRI emphasised that the US-Indonesia agreement should serve as a cautionary example for India. (AI image) India-US trade deal: America's trade agreement with Indonesia is 'one-sided' and India should look to avoid falling into the same trap, the Global Trade Research Initiative (GTRI) has warned. Even as the two countries continue discussions amid US President Donald Trump's August 1 tariff deadline, GTRI has cautioned against hasty deals that may harm India in the long run. The GTRI has warned that the US-Indonesia trade agreement is a 'clear example of how aggressive US pressure can force' nations into unbalanced trade commitments. According to a report released on Wednesday, GTRI stated that "The deal strongly favors the US, opens up Indonesia's markets, weakens its domestic regulations, and damages its long-standing position at the WTO." According to ANI, GTRI emphasised that this agreement should serve as a cautionary example for India in its trade discussions with the United States. US-Indonesia Trade Agreement 'One-Sided' The agreement stipulates that Indonesia will remove 99% of its tariffs on American exports, providing nearly complete access to its market for US industrial, technological and agricultural products. The United States, in exchange, will implement a 19% tariff on Indonesian goods, reduced from an initially proposed 40%. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Why seniors are rushing to get this Internet box – here's why! Techno Mag Learn More Undo Indonesian exports will continue to be subject to US MFN (Most Favoured Nation) tariffs. Also Read | Russia oil trouble hits: Shipowners and oil traders avoiding Russia-backed Nayara Energy in India; impact after EU sanctions Based on the trade agreement, Indonesia has committed to purchasing American goods valued at $22.7 billion. The breakdown includes $15 billion for energy products such as LPG, crude oil and petrol, $4.5 billion for agricultural commodities including soybeans, soybean meal, wheat and cotton, whilst $3.2 billion is allocated for Boeing aircraft, as detailed in the GTRI report. "The US-Indonesia trade deal forces Jakarta to give up key domestic regulations that have long protected its industries, food safety, and digital space," GTRI said. "Indonesia has agreed to eliminate local content requirements, which means U.S. companies can now operate in Indonesia without sourcing from local suppliers. This will hurt Indonesian MSMEs that rely on demand from larger firms. Making matters worse, there's no rule requiring US firms to disclose whether their inputs are sourced from China or other countries." Also Read | China's rare earth export curbs hit another industry! Apple AirPods production at Foxconn India unit faces hurdles; here's what's happening According to GTRI, Indonesia has agreed to adopt American vehicle safety and emissions standards. This enables US automobile manufacturers to directly export their vehicles to Indonesia without modifications, although Indonesian manufacturers must still meet US regulations for exporting to America. "By agreeing to remove restrictions on remanufactured goods, Indonesia opens the door to a flood of low-cost, second-hand machinery and components from the U.S. This could severely impact local capital goods and engineering firms that cannot compete with cheaper refurbished imports," the GTRI report read. India-US Trade Deal: The Indonesia Example GTRI noted that the United States has been attempting to secure comparable arrangements with India. A few days ago Trump had said that the deal with India could possibly be on the lines of the agreement with Indonesia in terms of market access. India currently faces comparable demands from the US, including permissions for remanufactured products, liberalisation of agriculture and dairy sectors, acceptance of genetically modified (GM) feed, and implementation of US-specified digital trade and product standards. Also Read | Trump tariff war: Deal or no deal - why it won't matter much for India "These are not small changes--they are major shifts that affect India's long-term ability to manage its economy, protect public health, and support local industries," GTRI opined. The organisation emphasised that India needs to maintain vigilance, whilst ensuring any trade agreements are founded on transparent, public evaluations of advantages and disadvantages. "Concessions--especially on critical areas like food, health, digital, and IP--must be fair, reciprocal, and aligned with India's development needs. Otherwise, India risks giving up long-term control for short-term gains, a decision it may regret later," it supplemented. The analysis suggests that Washington's pursuit of dominance over equitable practices might yield immediate advantages but could erode trust, disrupt international commerce, and hinder genuine economic collaborations. Also Read | Russia oil squeeze: Trump's 100% tariff threat - should India panic? Initially, US President Donald Trump implemented reciprocal tariffs on numerous nations where the US experienced trade deficits. Subsequently, President Trump announced a 90-day tariff suspension after several countries began trade deal discussions. During this period, from April 9 to July 9, he established a universal 10 per cent baseline tariff. The Trump administration extended the deadline for additional tariff implementation on various countries, including India, until August 1. Following his re-election, President Trump maintained his position on tariff reciprocity, stating that the United States would implement equivalent tariffs to those imposed by other nations, including India, to ensure trade fairness. A senior delegation from India's Commerce and Industry Ministry visited Washington DC to advance important discussions regarding a Bilateral Trade Agreement (BTA) with the United States. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
