US President Donald Trump has updated his tariffs, affecting nearly all US trading partners with rates ranging from 10% to 50%. Despite predictions of economic chaos, the impact so far has been less severe than expected. However, signs of economic pain are emerging, and experts warn that the situation could change.
Trump’s latest adjustments were not random acts of economic warfare but rather a strategic move to reveal a hierarchy among countries with security relationships with the US. Countries running trade deficits with the US, such as Australia, face 10% tariffs, while Japan and South Korea receive 15%. However, Asian nations now face average tariffs of 22.1%, including Thailand, Malaysia, and Indonesia.
The rest of Asia is facing significant pressure, with countries that negotiated “deals” with the Trump administration accepting elevated reciprocal tariff rates to maintain access to the US market. These deals often involved major concessions, such as dropping their own tariffs on US exports or promising to reform domestic regulations. However, protests in India and South Korea suggest many of these agreements were not popular.
Even the European Union has struck a deal with the US, accepting tariff rates that would have been unthinkable previously. The US Federal Reserve is concerned about potential price impacts, and interest rates remain unchanged despite Trump’s pressure on Chairman Jerome Powell.
The domestic consequences of Trump’s tariff policies are likely to be significant economic own goals. While exports to the US were “front-loaded” before the tariffs took effect, companies may still face rising costs due to the 50% tariff on semi-finished copper products. The average US tariff rate now stands at 18.3%, affecting typical imported goods and increasing taxes for American consumers by nearly one-fifth.
Source: https://theconversation.com/it-might-seem-like-trump-is-winning-his-trade-war-but-the-us-could-soon-be-in-a-world-of-pain-262434