New US tariffs cloud outlook for exporters in Asia and beyond

Elaine Kurtenbach, MDT/AP Business Writer

President Donald Trump’s new tariff rates on U.S. imports from dozens of countries took effect yesterday, the latest step in his ongoing reshaping of global trade. Yet many questions remain.

Trump has threatened tariffs of up to 200% on pharmaceuticals and imposed a 100% import tax on computer chips. Most copper, steel, and aluminum imports now face a 50% tariff. No final decisions have been made on tariffs for Chinese goods, and India faces a potential 50% tariff as Trump pressures it to stop buying Russian oil.

Recent data show the outlook for global exporters is increasingly uncertain, as a rush to beat the tariffs during a pause for negotiation has faded. Companies are reporting billions in higher costs and losses due to the new duties. Financial markets, however, remained steady on Thursday.

The tariffs apply to 66 countries, Taiwan, and the Falkland Islands. They stem from Trump’s “reciprocal tariffs” policy, first unveiled in April — with 50% duties on countries with U.S. trade surpluses and 10% baseline rates for others. Market turmoil prompted Trump to revise the plan, but the tariffs have now taken hold via emergency powers under a 1977 law — bypassing Congress, though the move is being challenged in court.

To maintain access to the U.S. market, many trading partners have made deals. The UK accepted 10% tariffs; the EU, South Korea, and Japan agreed to 15%. These are significantly higher than last year’s rates but lower than Trump’s original demands. Thailand, Pakistan, Vietnam, Indonesia, and the Philippines settled around 20%. Indonesia called its 19% deal an advantage over rivals like China and India.

Trump has not decided whether to extend an Aug. 12 deadline for reaching a China trade deal. He’s weighing another 90-day delay. The current proposal would impose 50% tariffs on most Chinese goods, including additional duties on items tied to illicit fentanyl trade.

Higher tariffs on small parcels from China have hurt smaller manufacturers and accelerated layoffs, with an estimated 200 million workers now relying on gig work. India, meanwhile, has no comprehensive trade agreement. This week, Trump ordered an additional 25% tariff on its Russian oil purchases, raising overall tariffs to 50%. India has defended the imports, citing energy shifts after the Ukraine war. An Indian export group warned that over half of India’s shipments to the U.S. will be affected, threatening client relationships and already thin margins.

Laos, Myanmar, and Syria face rates of 40–41%. Brazil was hit with a 50% tariff, reportedly due to Trump’s displeasure with its treatment of former president Jair Bolsonaro. South Africa says Trump’s 30% tariff on precious gems and metals threatens 30,000 jobs. Even Switzerland is lobbying Washington to avoid a 39% duty on chocolate and watches.

Goods compliant with the 2020 USMCA remain exempt. Though Canada was hit with a 35% tariff for its recognition of Palestine, most of its exports are duty-free. Mexican goods not covered by USMCA face a reduced 25% tariff for a 90-day negotiating window.

Surveys show weakening factory activity worldwide. Japan’s manufacturing contracted in July, but its new 15% tariff deal could ease pressure. Honda estimates a $3 billion tariff cost, while Toyota reported a 37% drop in quarterly profits, also citing a $3 billion tariff impact.

Even the U.S. economy — once Trump’s strongest argument — is showing signs of strain. [Abridged]