As President Donald Trump announced on a recent Sunday, the United States is nearing the completion of several trade agreements and is preparing to alert various nations of increased tariff rates that should take effect from August 1. The Trump administration has caused a worldwide upheaval in financial markets and prompted decision-makers globally to bolster their economies through such strategies as forming agreements with the U.S. and other countries.
At the heart of Trump’s trade strategy, unveiled in April, is a base tariff rate of 10% against the majority of nations, in addition to duties that could rise as high as 50%. Despite an initial announcement declaring these tariffs to be effective immediately, the timeline was postponed, affecting only the 10% tariff from July 9. This move allowed nations a breather of three weeks.
Although Trump had previously noted the August 1 date as the commencement of these tariffs, it remained ambiguous whether all tariffs would be enforced at that time. However, he later confirmed that higher tariffs would indeed come into effect from that date. As a precursor, the U.S. was to start issuing letters revealing the intended tariffs from 12:00 pm ET on the subsequent Monday.
Around this time, President Trump introduced another element to his trade policy, demanding nations that support the policies of the BRICS developing countries, which he tagged ‘Anti-American’, to pay an additional 10% duty, without any opportunity for exceptions. The inaugural BRICS summit in 2009 saw participation from Brazil, China, India and Russia, with South Africa joining later. The most recent addition of nations includes Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates.
Responding to this, the BRICS leaders deplored attacks on Gaza and Iran, promoted the overhaul of global institutions, and expressed concerns regarding the rising tariffs’ detrimental effects on global trade. However, it remained uncertain whether Trump’s tariff threats would hinder negotiations with India, Indonesia, and other BRICS nations.
The U.S. Treasury Secretary informed that some significant trade agreements were on the verge of being declared in the imminent few days and that discussions with the European Union were advancing positively. In addition, the U.S. also intended to issue letters to approximately 100 smaller trade partners notifying them of heightened tariff rates.
In contrast, countries actively engaged in negotiations may have some scope for flexibility. Such countries would need to make compromises to secure reduced tariff rates. The Trump administration is particularly interested in 18 key trading partners, responsible for 95% of America’s trade deficit.
However, the matter of concern was the noticeable stagnation among these countries in finalizing their respective trade agreements. As a proactive measure to avert a 36% tariff, Thailand proposed increased market access for American agricultural and industrial goods along with expanded purchase of U.S. energy, this response was shared by Finance Minister Pichai Chunhavajira with media outlets.
The United States and India are expected to reach a final decision concerning a minor trade deal within the coming 24 to 48 hours. Framework agreements already established with the United Kingdom and Vietnam can serve as models for other nations. Further to this, countries are purportedly moving manufacturing facilities to the United States under the increased pressure from Trump.
The post Trump’s Base Tariffs: A Game Changer for Global Trade? appeared first on Real News Now.
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