Trump tariff letters: While concluding his first 100 days in office in late April, US President Donald Trump had made a rather shocking claim, saying that he had completed 200 trade deals. But more than two months later, only three of those deals have been officially announced, and those are with China, the United Kingdom, and Vietnam.
However, the Trump tariff letters suggested a 50% rate for Brazil earlier today. The US President issued tariff letters to six more countries. He imposed 30% tariffs on Libya, Iraq, Sri Lanka, and Algeria and slapped 25% tariffs on Moldova and Brunei.
Vietnam-UK-China deal
Vietnamese Prime Minister Pham Minh Chinh and China’s Premier Li Qiang have agreed to strengthen trade and investment cooperation during talks held on the sidelines of the BRICS summit in Brazil, according to Vietnam’s government on Tuesday.
This development follows Donald Trump’s recent announcement of a new trade agreement with Vietnam, which will impose a 20% tariff on all Vietnamese exports to the US, along with a 40% tariff on goods transshipped through Vietnam from other countries, mainly China. This deal also dodges a 46% threat looming from April. However, businesses seem to worry how “transshipment” might be a politicised term and target Vietnam’s trade neighbour, China, as per reports.
“China will not accept…unilateral bullying”
The Chinese state media warned Trump against striking deals that sideline China. This came after Trump’s announcement that BRICS nations might be served higher tariffs. However, China’s media stated that, ““If such situations arise, China will not accept them and will resolutely take countermeasures to safeguard its legitimate rights and interests.”
The blitz targeting 14 countries including allies Japan and South Korea, is a cause of concern for China. With a possibility of facing 25-40% tariffs without a deal, the Trump-China trade war is likely to extend. Calling Trump’s response to reciprocal tariffs a “typical act of unilateral bullying”, China accused Trump of disrupting the “normal international trade order”.
US-UK June deal
The UK signed a deal in June with the US, which brought tariffs on British cars by more than 15%. Removing certain trade barriers, the deal still included a 10% levy on other goods include steel imports. The UK government said it would “continue to go further and make progress towards 0% tariffs on core steel products as agreed”.
Trump’s tariff letter
Ahead of the deadline, on Tuesday, Trump revealed that his administration views the one-sided tariff rates as a deal. “I just want you to know—a letter means a deal,” he said earlier. However, the letters, received by more than a dozen countries so far, do not describe negotiated trade deals.
“Our relationship has been, unfortunately, far from Reciprocal,” Trump wrote in the letters, which followed a reportedly standardised format. “We invite you to participate in the extraordinary Economy of the United States,” he wrote, “but only with more balanced, and fair, TRADE.”
“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the tariff that we charge,” Trump added.
These “reciprocal” tariffs, in question, come on top of targeted industry duties, such as a 25% tariff on cars and auto parts, and a 50% tariff on steel and aluminium imports. On the other hand, Trump announced a 50% tariff on copper to start on August 1, in a bid to promote domestic developments.