Trump’s August 1 tariff deadline threatens global trade shock
The United States wields tariff threat, forcing countries around the world to make deals to reduce trade impact
The US and the EU struck a deal to avoid the worst of the US's proposed tariffs (Photo via Wikimedia Commons)
The Trump administration’s sweeping “Liberation Day” tariffs are set to go into effect for over 20 countries on August 1, threatening to send shockwaves across the global economy. On Wednesday, Trump announced that he would not be extending this deadline.
The United States’ largest trading partner, the European Union, struck a deal with the Trump administration days before the deadline in order to decrease the tariff rate. After agreeing to buy USD 750 billion in US energy and commit an additional USD 600 billion in new investments beyond existing levels, the EU will only see a 15% tariff rate as opposed to the 30% rate that was originally proposed. Trump also claimed the bloc would be “purchasing hundreds of billions of dollars worth of military equipment,” though he did not offer a specific figure.
Other major trading partners, such as Mexico and Canada, have not struck deals with the US. The US is set to impose 35% tariffs on Canadian goods as of August 1, and a 30% rate on Mexican goods. The 50% tariff rate on steel and aluminum imports for both countries is set to remain in place. An additional 50% rate on copper imported from Mexico is set to also go into effect on August 1.
Brazil is set to be hit with a 50% tariff, the highest country-specific reciprocal tariff, due to the Brazilian government’s prosecution of former president Jair Bolsonaro for involvement in a coup attempt.
Trump announced on Wednesday that he would impose 25% tariffs on goods from India, as well as an additional import tax due to India’s purchase of Russian oil. “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” Trump wrote in a post on Truth Social, adding that India has “always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!”
Escalation in US trade war against China hangs in the balance
After wrapping up two-day negotiations between Chinese and US officials in Stockholm, there is no extension in site for the US-China tariff deadline set for August 12. US Treasury Secretary Scott Bessent hinted to press that an extension is still possible, pending a decision from the US president.
“We’re going to head back to Washington and we’re going to talk with the president if that’s something he wants to do,” US Trade Representative Jamieson Greer told press on Tuesday.
If Trump does not decide to extend the deadline, the tariff rate on Chinese goods would snap back to 80%.
