Donald Trump’s recent 15% global tariff could lead to unexpected benefits for countries he often criticizes, like China and Brazil. According to Global Trade Alert, Brazil is set to see a significant drop in tariffs, with rates declining by 13.6 percentage points, while China follows with a 7.1 percentage point reduction.
In contrast, long-time US allies such as the UK, EU, and Japan might bear the brunt of these tariffs. This shift in trade policy comes after a Supreme Court ruling that deemed much of Trump’s previous tariffs unlawful. Following that ruling, Trump announced a new blanket tariff that initially started at 10% and was quickly adjusted to 15%.
US trade representative Jamieson Greer explained that while the administration lost some flexibility due to the court’s decision, they will still pursue investigations into unfair trade practices. He noted that many countries, despite the changes, have not pulled away from existing trade agreements. Greer is optimistic that partners will see how the situation develops, maintaining that they had been prepared for potential tariff changes.
Johannes Fritz, an economist, highlighted an interesting trend: countries often criticized by the White House, like Mexico and Canada, have lower tariffs now, benefiting from the new regime. Asian nations like Vietnam and Thailand, known for manufacturing a variety of goods, will also see a boost. Greer mentioned that future investigations may focus on countries with excess manufacturing capacity to ensure a fair playing field for US products.
Importantly, the new tariffs will still affect US allies, especially in sectors like steel and autos. Secretary of the Treasury Scott Bessent confirmed that foreign trading partners are keen on keeping their deals intact. However, the European Commission has called for clarity on the US’s intentions, emphasizing that mutual respect for agreements is essential for beneficial trade relations.
The immediate impact of the new tariffs is notable. The UK will experience a rise in average tariff rates, which may surprise 40,000 UK companies exporting goods to the US. Allie Renison, a former trade official, explained that the UK is in a difficult position: whether to push for better terms or wait to see how the situation unfolds.
In summary, this unexpected shift in tariffs could shake up global trade dynamics, impacting both critics and allies of the US. As the landscape evolves, companies and governments will closely monitor the developments, hoping for clarity and stability in international trade.
For more background, you can read about the Supreme Court’s decision and its implications here.
