WORLD NEWS FOR MONTENEGRO DIASPORA
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AUTHOR:M.J. GDNUS
The tariffs announced by US President Donald Trump last week went into effect on about 90 countries just after midnight, the latest escalation in a global trade war that has already begun to take its toll on the US economy.
Few of the US’s major trading partners escaped the new rules in Trump’s updated list of tariffs, which collectively pushed the average effective rate of US tariffs to its highest level in nearly a century. In the hours before the tariffs took effect, the president announced more, doubling down on a strategy that has rattled markets, raised prices and created uncertainty among consumers and businesses around the world, the New York Times reports.
Trump announced the new tariffs in a series of executive orders he signed last week, some of which formalized preliminary trade agreements he had recently reached with the European Union and other countries. The US president has long argued that the measures will help reset trade relations he sees as unfair, bring new revenue to the US government, boost domestic manufacturing and achieve other goals.
Trump’s tariffs have indeed brought in money, about $152 billion in customs revenue as of July, the latest figures show, but his policies have not been without consequences. A growing number of companies have recently warned that they can no longer withstand the rising costs of key foreign components, according to the NYT.
As a result, prices have begun to rise. The latest monthly inflation index shows that appliances, clothing and furniture all rose in June. The economy has grown, but very slowly, and some analysts predict little or no improvement until the end of the year. The job market is also under pressure, with hiring slowing sharply in July.
Tariffs start at 15 percent and target imports from countries such as Bolivia, Ecuador, Iceland and Nigeria. Others, such as Taiwan, face a 20 percent tariff on products sold to U.S. buyers. Trump has also imposed a much higher 50 percent tariff on certain goods from Brazil. He has presented it as punishment for Brazil’s decision to file charges against his political ally, Jair Bolsonaro, the country’s former president, for trying to stay in power after losing an election.
Trump also said yesterday that he would raise tariffs on India to 50 percent by the end of August for buying Russian oil. The president has said other countries could be hit with similar penalties as he looks for ways to use trade policy to pressure Russia to end its war in Ukraine. The tariffs do not apply to goods from abroad that were loaded onto ships shortly before Aug. 7. Those products in transit will not be taxed under the new rules if they enter the U.S. before early October, potentially giving importers room to build up larger inventories before the high tariffs hit their pockets.
Many smaller countries have already faced 10 percent tariffs on their exports since the president first announced and then suspended the first set of measures in April. Other countries have avoided heavy tariffs by agreeing with the United States to keep their rates mostly between 15 percent and 20 percent.
That includes the 27-member European Union, as well as Japan, South Korea and Vietnam. All of those governments have promised to open their markets to American products and, in some cases, have pledged to invest billions of dollars in American industry. But the exact terms of those agreements remain unclear.
In addition, Trump has imposed a 35 percent tariff on goods from Canada that are not covered by the existing U.S.-Mexico-Canada Agreement. The measures took effect on Friday. Similarly high tariffs on Mexico have been temporarily suspended while negotiations continue. And tariffs on Chinese goods remain at the 30 percent level agreed between the two powers earlier this year, although the truce could expire on Tuesday.
The tariffs that have come into effect are likely not the last chapter in Trump's expanding trade war, which is already facing a series of legal challenges in federal courts, the NYT estimates, stating that he still plans to impose additional tariffs on foreign drugs, computer chips and other products.
