Trade taxes imposed by the U.S. to take effect on August 1, unless agreements with other countries are reached
In a recent development, President Donald Trump announced that he had signed 12 letters to inform various countries about impending tariff hikes, with the letters set to be delivered on Monday, July 12. This announcement comes as the status of US tariff deals with several trading partners remains uncertain.
As of July 6, 2020, the US has yet to finalise trade deals with the European Union and Taiwan. The United States has threatened to impose tariffs beginning August 1 if these agreements are not reached by then. Treasury Secretary Scott Bessent confirmed that unless agreements are reached, the tariffs initially paused until July 9 will be reinstated at their original high levels, as announced in April.
In contrast, the US and Vietnam have reached a trade deal involving tariffs. Under this agreement, Vietnamese exports to the US will face a 20% tariff, and goods suspected of being transshipped, containing Chinese components routed through Vietnam, will incur a 40% duty. This deal mirrors provisions in the US trade agreements with Mexico and Canada, aiming to counteract trade routing through Vietnam to avoid higher Chinese tariffs. The full details of this deal remain partly undisclosed.
Negotiations with China have resulted in a temporary reduction of tariff rates for 90 days. Duties have been lowered from as high as 145% down to 30% and from 125% to 10%. Tariffs on small shipments below the $800 de minimis threshold have also been substantially cut. However, China has requested that the US eliminate tariffs first, leading to ongoing trade tensions. A broader "trade deal" had been declared done by President Trump on June 11, but China described it only as a preliminary framework.
President Trump and his administration have been aggressively pushing forward with tariff policies despite court challenges. The administration plans to send letters to countries explaining the tariff rates and the terms they must meet to obtain lower rates. Several deals are reportedly close to being finalized, but the administration is prepared to reinstate high tariffs starting August 1 for countries that do not reach agreements.
In light of these developments, countries have been trying to strike deals to avoid the elevated duties of the tariffs. Washington and Beijing have agreed to temporarily lower staggeringly high levies on each other's products, but the future of these tariffs remains uncertain. As the August 1 deadline approaches, it remains to be seen whether the US will follow through with its threat of imposing tariffs on trading partners from Taiwan to the European Union.
- Finance experts and business analysts are providing commentary on the potential impacts of the US tariffs on various global markets, as the deadlines for negotiating tariff deals with several countries, including the European Union and Taiwan, approach.
- Recent dramatic shifts in US tariff policies, particularly the announcement of impending tariff hikes and the reinstatement of previously paused high tariffs, are creating turmoil in the finance sector and raising concerns among businesses that rely on international trade.
- In the realm of general-news and politics, the ongoing tariff conflicts between the US and its trading partners are becoming central topics, with the potential for new tariffs on US imports from countries such as Taiwan and the European Union being closely monitored by policymakers, business leaders, and the public.
