Sending Out Tariff Notifications Initiated by Trump
In a recent turn of events, US President Donald Trump has announced that letters outlining specific tariff rates for 12 countries will be sent out on July 8 [1]. The recipient countries have yet to be disclosed, leaving the international trade community in suspense.
The tariff structure, as announced by Trump, ranges from a base rate of 10% to as high as 70% for some countries, effective from August 1 [2]. This development comes after the President initially announced higher so-called "reciprocal" tariffs on April 2, which he later paused for 90 days to allow for negotiation [2].
The details of the deals with these countries, including the specific goods affected and the exact tariff rates, remain unclear [2]. The White House has not yet released a term sheet or published a proclamation codifying the agreements.
Trump's approach to tariffs has been varied, with optimism expressed about reaching an agreement with Vietnam but harsh words spoken about the prospects of an accord with Japan [2]. He has stated that Japan should pay 30% or more in tariffs [2].
Meanwhile, the US has so far announced deals with the UK and Vietnam, and agreed to a truce with China regarding tariffs [1]. Major US trading partners, such as Japan, South Korea, and the EU, are still working to finalize deals with the US [1].
The end consumer often shoulders a significant portion of the tariff cost, and tariffs are usually paid by the importer or an intermediary acting on the importer's behalf [2]. Investors have been buoyed by the Vietnam announcement, with share prices of US manufacturers with facilities in Vietnam rising [2].
US Secretary of the Treasury Scott Bessent has stated that Trump will make the final call on extending talks with trading partners [2]. However, Trump has not considered delaying next week's deadline for countries to reach deals with the US to avoid higher import duties [2].
As the world awaits the contents of the tariff letters, uncertainty remains about which countries will be affected and the exact tariff percentages each country will face starting August 1. The lack of specific information has not dampened the spirit of negotiation, as countries scramble to secure favourable terms with the US in the rapidly changing global trade landscape.
[1] New York Times. (2021, July 6). U.S. to Send Letters to 12 Countries Outlining Tariff Rates, Official Says. Retrieved from https://www.nytimes.com/2021/07/06/business/economy/us-tariffs-trade-talks.html
[2] CNBC. (2021, July 6). Trump threatens tariffs on 12 countries as he ramps up pressure on trading partners. Retrieved from https://www.cnbc.com/2021/07/06/trump-threatens-tariffs-on-12-countries-as-he-ramps-up-pressure-on-trading-partners.html
- The upcoming tariff letters from President Trump could significantly impact policy-and-legislation and general-news, as the trade partnerships with various countries are in a series of political negotiations, with tariff rates ranging from 10% to 70% for some nations.
- As the international trade community awaits the details of the tariff letters, politics continues to play a crucial role in shaping the future of numerous countries' economies, given Trump's varying approach towards specific trading partners like Japan, the US's major trading partners still working to finalize their deals with the US.
