Trump sets new tariffs on dozens of countries’ exports

United States President Donald Trump has signed an executive order reimposing “reciprocal tariffs” ranging from 10 percent to 41 percent on US imports from dozens of countries and foreign locations.

Separately, Trump also signed an executive order late on Thursday that increased tariffs on certain Canadian goods, with the White House accusing Ottawa of failing to “cooperate in curbing the ongoing flood of fentanyl and other illicit drugs” entering the US.

In a statement on Thursday titled “Further Modifying the Reciprocal Tariff Rates”, the US listed some 69 trading partners and their respective “adjusted” tariff rates.

US-bound exports from some of Washington’s major trading partners – including Australia and the United Kingdom – will be subject to a baseline rate of 10 percent. Other trade partners will see tariffs of 15 percent or more.

Trump cited the “continued lack of reciprocity in our bilateral trade relationships” in a statement on the White House website announcing the reimposition of the tariffs.

“I have determined that it is necessary and appropriate to deal with the national emergency declared in Executive Order 14257 by imposing additional ad valorem duties on goods of certain trading partners,” he said.

Most of the announced tariffs will not go into effect until August 7, except for tariffs on Canada, which take effect on August 1.

The White House said the delay will give Customs and Border Protection time to adjust to the changed environment.

Adjusted rates and expectations

Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, told Al Jazeera that the tariffs were announced just hours before the latest deadline.

Trump has already hit pause on the tariffs several times since he first announced his April 2 “Liberation Day” tariffs on most US trade partners.

“The existing legal authority for tariff modifications was set to expire at 12:01am on August 1. It was necessary to issue new rules; otherwise, everything would snap back to rates set on April 2,” she said.

Elms told our reporters the latest round of rates from July 31 was based on unusual calculations.

“The numbers are all over the place. The original formula was nonsense, but at least it had a logic. These rates do not appear to fit known facts. Some countries that bargained hard got better outcomes. Some did not. Some that didn’t get a hearing went down while others were increased,” she said.

Inu Manak, a trade policy expert at the Council on Foreign Relations, said many countries may try to negotiate tariff rates before the August 7 deadline.

“The new rates won’t be implemented for seven days, so that gives countries that were already well into negotiations another week to secure a deal and never have these new tariffs imposed,” Manak said. The incentive is high for countries with a tariff of 15 percent or more to strike a deal, she added.

Tariff calculations

The July 31 tariffs retain a 10 percent “universal tariff” for most countries with which the US holds a trade surplus, or where the US exports more goods than it receives.

The major changes were for countries with which the US holds a trade deficit, or where the US sells fewer goods than it receives.

These countries face a base 15 percent tariff, although rates vary depending on whether they reached a deal with the White House or how Trump feels about their economy.

The White House previously announced tariff agreements with the European Union, Japan, the Philippines, Indonesia, South Korea, Vietnam, Cambodia, Pakistan, Thailand and the UK. It is also setting separate tariffs for key industries and exports such as semiconductors, automotive, auto parts, steel and aluminium.

Rates have dropped for most countries with which the US holds a trade deficit, although there were some surprises.

Taiwan’s initial tariff rate of 32 percent dropped to 20 percent, but the figure is still higher than a deal made by neighbouring Japan and South Korea.

India also faces a 25 percent tariff despite its close relationship with the US, while tariffs for Pakistan fell from 29 to 19 percent.

Experts were scratching their heads over the decision to raise tariffs for Switzerland from 31 to 39 percent, and set tariffs at 41 percent and 40 percent for war-torn Syria and Myanmar, respectively.

Other notable tariffs include 40 percent for Laos, 35 percent for Iraq and Serbia, and 30 percent for Algeria, Bosnia and Herzegovina, Libya and South Africa.

“The Trump administration takes a country-by-country approach when it comes to trade. There is no overarching theory to explain the specifics for each country. Each country gets its own tariff rate based on the view of the president at that given time, for trade reasons or otherwise,” said Steve Okun, founder and CEO of APAC Advisors in Singapore.

Canada in the firing line

In a separate White House fact sheet, Trump said he would raise tariffs on Canada from 25 to 35 percent. China and Mexico, however, were notably absent from Trump’s latest list despite drawing his ire earlier this year.

Lynn Song, chief economist for Greater China at ING, told Al Jazeera that Trump may still be deciding how to respond after US and Chinese officials met in Stockholm this week to discuss tariffs.

China is set to face an additional 30 percent tariff on most of its goods if an agreement is not reached by August 12.

Mexican President Claudia Sheinbaum said on social media that Washington had agreed to a 90-day extension thanks to ongoing dialogue.

Transshipped goods are those moved between vessels at an intermediate destination during transit to their final destination. The technicalities of the rules are being worked out, the official added.

The US is also set to implement new rules of origin to determine tariff rates on transshipped goods in the coming weeks, the Reuters news agency reports, citing an unnamed senior Trump administration official.