Trump's recently imposed tariffs show leniency towards certain nations, while global stocks and US currency value plummet
In a move that has caused ripples across the global trade landscape, President Trump has implemented steep reciprocal tariffs on several countries, including Canada, Switzerland, and Taiwan. This decision has led to a significant increase in import levies on their goods entering the United States, causing diplomatic and economic friction.
Canada Faces Increased Tariffs and Calls for Diversification
Canada is facing an increase on certain products to above the previous 25% tariff, with the US raising tariffs as a response to what it calls Canada's "continued inaction and retaliation" under the US-Mexico-Canada Agreement (USMCA). Additionally, there is a 40% transshipment levy targeting goods rerouted through Canada to evade tariffs. In response, Canadian officials have emphasized the need to diversify export markets and boost domestic investment, pledging to strengthen internal demand and utilize Canadian resources.
Switzerland and Taiwan Brace for Reciprocal Tariffs
Switzerland is subject to a 39% reciprocal tariff on all products, effective July 31, 2025, but its implementation was delayed until August 7. This tariff is part of a wider executive order and is reported to cause regret and disappointment in Switzerland, reflecting tension in trade relations. Taiwan, on the other hand, confronts a 20% tariff on its goods, also effective July 31, 2025, but delayed until August 7, classified under reciprocal tariffs. Taiwan's President Lai Ching-te described this tariff as temporary and is working toward negotiating lower rates.
Other Countries Affected and Responses
Australia's exports to the United States are subject to a 10% overall tariff, while the EU-US deal on tariffs calls for a 15% tariff on EU goods. France is considering renegotiating parts of the EU-US deal on tariffs to make it more favorable for European producers. Thailand is subject to a 19% tariff, down from the proposed 36%, and Pakistan welcomed a trade deal that sets a 19% duty on its exports, lower than the initial plan for 29%.
In a positive development, Cambodia will impose zero tariffs on American goods, after Trump set the tariff rate on Cambodian goods at 19%. This move is seen as a step towards strengthening cooperation between the two nations.
The Impact on US Stock Markets and Global Trade
These tariffs have contributed to market unease, with US stock markets reacting negatively. Affected countries, however, are not just standing idly by. They are expressing both concern and strategic plans to mitigate the impacts. Some countries like Thailand and Cambodia, who received relatively lower tariffs, view this more positively.
Negotiations for Relief and Strategic Moves
In response to the new tariffs, Taiwan's President Lai Ching-te hopes for a further reduction in the tariff rate after a final round of talks. Canada, too, is seeking relief from the increased tariffs, with Prime Minister Justin Trudeau stating that the country will "take whatever measures are necessary to defend Canadian workers and businesses."
This escalation in trade tensions has also prompted some countries to seek new trade partners. For instance, Norwegian Prime Minister Erna Solberg has expressed his desire for "zero tariffs" for his country, objecting to a 15% tariff rate. Japan's Chief Cabinet Secretary Yoshimasa Hayashi has expressed caution in welcoming the new tariff rates for Japan.
Implications for National Security and Technology
The US and Taiwan are aiming to strengthen cooperation in national security, tech, and multiple areas, despite Trump's new tariff rates on Taiwanese goods. Taiwan is a key supplier of advanced semiconductors needed for many products and technologies, making this cooperation crucial.
In summary, Trump's new tariffs sharply raise import levies on Canadian, Swiss, and Taiwanese goods entering the US, causing diplomatic and economic friction and prompting affected countries to seek diversification and negotiations for relief. As the situation unfolds, it remains to be seen how these developments will shape the global trade landscape in the coming months.
- Canada's Prime Minister Justin Trudeau is aiming to negotiate relief from the increased tariffs imposed by the US, with the country also planning to diversify export markets and boost domestic investment.
- Japan's Chief Cabinet Secretary Yoshimasa Hayashi has expressed caution in welcoming the new tariff rates for Japan, an indication that Japan might also be exploring alternative trade strategies.
- Despite the new tariffs, the US and Taiwan are collaborating in national security, technology, and multiple areas, highlighting this Asian country's strategic importance as a supplier of advanced semiconductors.
- Australia, Thailand, and Pakistan are among the countries affected by the US tariffs, with Thailand and Cambodia receiving relatively lower tariffs and viewing this situation more positively.
- The implementation of these reciprocal tariffs has led to worry in the global economy, as reflected in the negative reaction of US stock markets and the strategic moves undertaken by affected countries to cushion the impacts.
