Trump makes rapid series of tariff declarations
In a series of recent announcements, President Trump has implemented new tariffs on exports from Brazil, India, and South Korea, impacting multiple sectors of trade with the United States.
Impact on US Trade with India, Brazil, and South Korea
- Brazil faces a high 50% tariff on its exports, although several important products such as orange juice, civil aircraft, iron ore, and some energy products are exempted. The implementation has been delayed until August 6 to allow adjustment.
- India is subject to a 25% tariff on its exports, raising costs and potentially reducing its export volume to the US.
- South Korea secured a comparatively lower 15% tariff, significantly below the initially threatened 25%. This rate applies to all products including automobiles, a key South Korean export, likely lessening the negative trade impact and preserving significant trade volumes. Additionally, South Korea agreed to invest a large but unspecified sum in the US, reinforcing bilateral economic ties despite tariffs.
Industry-Specific Impact
- Copper Mining and Trade: Trump enacted a 50% tariff on copper imports, targeting the metal for national security reasons. This tariff initially caused copper prices to surge to record highs, increasing production costs for industries relying on copper such as electronics, construction, appliances, automobiles, and electrical infrastructure. However, the tariff excludes refined copper itself and applies mostly to copper products like pipes and wires. This exemption surprised traders, triggering a sharp 20% drop in copper futures as traders who pre-stocked refined copper to avoid tariffs were left with oversupply. The US is not fully self-sufficient in copper smelting capacity, with significant reliance on foreign processing, making the tariff a complex disruption in the copper supply chain.
- Shipbuilding and Related Sectors: While none of the search results explicitly mention direct tariffs on shipbuilding industries, Brazil’s tariff does affect civil aircraft and some industrial products, which may indirectly impact sectors related to heavy manufacturing and shipbuilding, given these industries' interlinked supply chains. South Korea’s 15% tariff covering automobiles might imply tariffs on other manufactured goods, potentially affecting Korean shipbuilding exports or components.
In summary, Trump's tariffs have introduced significant trade barriers, particularly harsh on Brazil’s exports and somewhat less so on South Korea due to diplomatic negotiation. The copper tariffs aim to enhance US domestic production but have created market volatility and expose gaps in the copper supply chain processing capabilities. The shipbuilding industry's direct impact is less clear but may face indirect effects through tariffs on related manufacturing sectors from these countries.
Notable developments include a trade deal between the US and South Korea that includes a 15% tariff on imports, a $150 billion shipbuilding partnership, and South Korea's agreement to purchase $100 billion of liquefied natural gas and other energy products. Brazilian Treasury Secretary Rogerio Ceron stated that the tariff outcome is more benign than it could have been. Trump plans to sign executive orders imposing higher tariff rates on several countries, and has already imposed a 50% tariff on most Brazilian goods, but excluded sectors such as aircraft, energy, and orange juice.
- The steel and aluminum industries in Malaysia may face challenges due to the ongoing tariffs imposed by the US, given the close trade relationship between the two countries.
- The new economic policy-and-legislation announced by the Malaysian government may be impacted by the turbulent global economy and trade scenarios, as they strive to maintain a stable finance sector.
- General news outlets in Malaysia are closely monitoring the US-Malaysia trade dynamics, as any changes could potentially influence local economics and investment opportunities.
