In 2024, the U.S. trade deficit increased by 17 percent to US$918.4 billion.

On Wednesday, President Donald Trump imposed tariffs on goods and services from all countries with which the United States maintains trade relations. His “Liberation Day” has sparked a trade war that will slow global commerce and push the world toward recession.

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More specifically, Trump imposed a universal tariff of 10 percent on all U.S. imports, a 20 percent tariff on all imports from the European Union (EU), and an additional tariff specific to each country, which was calculated according to the “historical harm” that a given nation has caused the United States.

This is what Trump has referred to as a “reciprocal tariff,” in response to the alleged taxes on American products in other countries, which he blames for the U.S. trade deficit.

The general minimum tariff of 10 percent will take effect on Saturday, April 5, while the additional part affecting each nation will begin to apply on April 9. The 25 percent tariffs on automobiles, light trucks, and auto parts imported into the United States took effect this Thursday.

Through these decisions, Trump seeks to improve his country’s external accounts. In 2024, the U.S. trade deficit increased by 17 percent to US$918.4 billion, making it the second most negative trade balance in history.

Main Affected Countries

The tariffs primarily impact Europe and Asia, with a 20 percent charge on the EU, 24 percent on Japan, 26 percent on India, 17 percent on Israel, and 10 percent on most Latin American nations, including Argentina, Brazil, Colombia, Chile, Ecuador, Guatemala, Honduras, Peru, and Costa Rica.

In the case of China, the tariff is added to a previous 20 percent tariff, bringing its total levies to 54 percent. Taiwan, a vital semiconductor partner, will suffer an increase of 32 percent; South Korea, a major exporter of automobiles and electronics, will face a 25 percent tariff; and Vietnam, a key trade partner of both China and the U.S., will see tariffs rise to 46 percent.

Very high import taxes will fall on developing countries such as Cambodia (49 percent), Madagascar (47 percent), Myanmar (45 percent), and Botswana (38 percent).

Exempt Countries and Sectors

Canada and Mexico, which have a free trade agreement with the U.S., have avoided the new wave of tariffs; however, the 25 percent tariffs Trump imposed on steel and aluminum from these countries remain in place.

The U.S. president excluded Russia, Cuba, North Korea, and Belarus from his global tariff round because these countries are already subject to severe economic sanctions. A senior Trump administration official stated that these nations “already face extremely high tariffs” that “prevent any significant trade with these countries.”

Some sectors and products have been exempted from the tariffs, including copper (which benefits Chile), pharmaceuticals (to the delight of India’s pharmaceutical industry, considered the world’s pharmacy), semiconductors (which benefits Taiwan), and timber, as well as aluminum goods and vehicles and parts that are already subject to customs duties. Other untaxed products include energy resources and minerals that are not available in the United States.

And Now, the Countermeasures

The President of the European Commission, Ursula von der Leyen, said that the EU is “prepared to respond” to the imposition of tariffs, though she added that it is never too late to negotiate.

The French government specified that Europe is ready for “this trade war” and will take action against American digital giants. The French business federation indicated that European exports of wine and spirits to the United States could decrease by 1.6 billion euros per year due to the tariffs.

China expressed its “firm opposition” to the reciprocal tariffs announced by U.S. President Donald Trump and promised retaliatory measures to “safeguard” its rights and interests.

Latin American countries have generally reacted cautiously, although the government of Brazilian President Lula da Silva stated that it is considering responding with “reciprocity” to Washington’s measures and announced that it will file a complaint with the World Trade Organization (WTO).

teleSUR/ JF

Source: EFE

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