Higher US levies on dozens of countries come into effect

WASHINGTON (AFP): Higher U.S. tariffs imposed on dozens of its trading partners came into effect on Thursday, raising the stakes in President Donald Trump’s wide-ranging efforts to reshape global trade in favor of Washington.

Shortly before the new levies kicked in, Trump separately announced his decision to double Indian tariffs to 50% and hit many semiconductor imports from around the world with a 100% levy.

As an executive order signed last week took effect, U.S. duties rose from 10% to levels between 15% and 41% for a list of trading partners.

Many imports from economies, including the European Union, Japan and South Korea, now face a 15% tariff, even with deals struck with Washington to avert even steeper levies.

But others like India face a 25% duty – to be doubled in three weeks – while Syria, Myanmar and Laos face staggering levels at either 40% or 41%.

Switzerland’s government, which failed to convince Trump not to impose a stinging 39% tariff, was set to hold an extraordinary meeting later Thursday.

Taking to his Truth Social platform just after midnight, Trump posted: “IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!”

The latest tariff wave of “reciprocal” duties, aimed at addressing trade practices Washington deems unfair, broadens the measures Trump has imposed since returning to the presidency.

‘No charge’

On the eve of his latest salvo, the U.S. president doubled planned duties on Indian goods to 50%, citing New Delhi’s continued purchase of Russian oil. The new levy – up from 25% now – would take effect in three weeks.

The Federation of Indian Export Organisations called the move a “severe setback for Indian exports, with nearly 55% of our shipments to the U.S. market directly affected.”

For New Delhi, one of the main sticking points has been Washington’s demand to access India’s vast agricultural and dairy market.

“We will not compromise with the interests of our farmers, our dairy sector, our fishermen,” Prime Minister Narendra Modi said Thursday.

Trump’s order also threatened penalties on other countries that “directly or indirectly” import Russian oil, a key revenue source for Moscow’s war in Ukraine.

Washington has already separately imposed tariffs on sector-specific imports such as steel, autos and pharmaceuticals.

Trump said Wednesday he also planned an “approximately 100% tariff” on semiconductor imports, but with “no charge” for companies investing in the U.S. or committed to doing so.

Shares in Taiwanese chip-making giant TSMC surged on Thursday as Taipei said it would be exempt, but some other Asian manufacturers took a beating.

Companies and industry groups warn that the new levies will severely hurt smaller American businesses, while economists caution that they could fuel inflation and hit growth.

With the dust settling on countries’ tariff levels, at least for now, Georgetown University professor Marc Busch expects U.S. businesses to pass along more of the bill to consumers.

‘This will matter’

An earlier 90-day pause in these higher “reciprocal” tariffs gave importers time to stock up, he said.

But although the wait-and-see strategy led businesses to absorb more of the tariff burden initially, inventories are depleting and it is unlikely they will do this indefinitely, he told Agence France-Presse (AFP).

“With back-to-school shopping just weeks away, this will matter politically,” said Busch, an international trade policy expert.

The tariffs leave lingering questions for partners that have negotiated deals with Trump recently.

Tokyo and Washington, for example, appear at odds over key details of their pact, in particular on when lower levies on Japanese cars will take place.

Generally, U.S. auto imports now face a 25% duty under a sector-specific order. Japanese giant Toyota has cut its full-year profit forecast by 14% because of the tariffs.

Japan and the U.S. also appear to differ on whether the “reciprocal” tolls of 15% on other Japanese goods would be on top of existing levies or – like the EU – be capped at that level.

China and the U.S., meanwhile, currently have a shaky truce in their standoff, but that is due to expire on Aug. 12.

Trump has separately targeted Brazil over the trial of his right-wing ally, former president Jair Bolsonaro, who is accused of planning a coup.

U.S. tariffs on various Brazilian goods surged from 10% to 50% on Wednesday, but broad exemptions, including for orange juice and civil aircraft, are seen as softening the blow. Still, key products like Brazilian coffee, beef and sugar are hit.