At midnight Thursday, the US kicked off a sweeping set of "reciprocal tariffs" that slapped duties ranging from 10% to 50% on imports from more than 90 trading partners. The move has ignited a wave of criticism around the globe.
Brazil's government formally requested World Trade Organization consultations after Washington imposed a 50% tariff on Brazilian exports—one of the highest rates so far. President Luiz Inácio Lula da Silva condemned the measure as "unacceptable blackmail," setting the tone for a fiery showdown at the WTO.
India faces a similar 50% levy later this month unless a new deal is struck. Prime Minister Narendra Modi struck a defiant tone, vowing he would "not compromise farmers' interests" even at a heavy economic cost.
In Europe, Switzerland saw its efforts to avert a 39% US tariff collapse after talks in Washington fell through. Swiss exporters, especially in pharmaceuticals and machinery, warned of a "horror scenario" if the duties take hold, while Bern pledges to pursue further negotiations.
By contrast, the European Union and Japan secured exemptions by offering major concessions. The EU agreed to channel $600 billion in investments into the US and purchase $750 billion in American energy. Japan accepted a 15% auto tariff and committed to $550 billion in US investments alongside increased rice imports.
Talks in Stockholm last month between the US and the Chinese mainland set the stage for a possible extension of a 90-day tariff pause. Meanwhile, exports from the Chinese mainland jumped 8% year-on-year in July—beating expectations and underscoring resilience in global trade.
On July 22, the International Monetary Fund warned these broad tariffs could have "significant macroeconomic effects"—dampening global demand, triggering supply shocks, and fueling inflation. The IMF cautioned that tariff uncertainty risks eroding business and consumer confidence and could deepen geo-economic fragmentation.
The cost is already hitting US households. Yale University's Budget Lab reports the average effective US tariff rate climbed to 18.3% in July—the highest since 1934. The analysis estimates this spike will cost the typical American family an extra $2,400 annually in higher import prices.
He Weiwen, a senior fellow at the Center for China and Globalization, warns the US may be inadvertently driving other nations to forge stronger trade links without American participation.
With global markets on edge, negotiators and businesses alike are bracing for what comes next. Will de-escalation prevail, or will new barriers redefine the future of international trade?
Reference(s):
cgtn.com
