U.S. President Donald Trump’s so-called “reciprocal” tariffs took effect on Thursday, imposing higher duties on many of the country’s trading partners’ exports to the U.S.
“IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!” Trump wrote on social media platform Truth Social.
In an earlier post Trump had said the tariffs were targeting “COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS.”
Trump last week — ahead of his Aug. 1 tariffs deadline — rejigged the tariff rates and pushed back the deadline to Aug. 7.
Some of the steepest duties include Syria’s 41%, and Laos and Myanmar’s 40% rate, while Switzerland — after being unsuccessful in a last-minute scramble for a deal — is facing 39% tariffs.
Swiss negotiators this week travelled to Washington D.C. for talks after the country’s higher rate came as a surprise to many, but so far, no deal appears to have been agreed. An update is expected from the Swiss government later on Thursday.
Separately, Brazil and India are both now facing duties of 50%. While Brazil’s tariffs appear to have kicked in, India’s rate is at 25% for now, and will rise to 50% later this month, according to an executive order signed Wednesday. Trump said his tariffs on India are related to its current purchases of Russian oil.
Other countries and regions, meanwhile, have been able to strike trade agreements with the U.S. This includes the European Union, Japan and South Korea — which all now face 15% tariffs — as well as the U.K., which negotiated a 10% rate.
Others, including China and Mexico, remain in limbo. China is engaged in something of a trade truce with the U.S. for now, while previously announced rates for Mexico are on pause.
‘This game is not over’
Trump’s latest tariff announcements — including higher duties on India and threats of 100% tariffs on chips — show “this game is not over,” according to Bill Papadakis, macro strategist at Lombard Odier.
“There has been some optimism building recently because the overall level of uncertainty has come down,” he told CNBC’s “Europe Early Edition” on Thursday, pointing out that several deals have been made and Trump has walked back some of his threats.
“But we shouldn’t be overly optimistic either,” he warned, as the impact of tariffs on economic growth and inflation is not yet clear.
Beat Wittmann, chairman and partner at Zurich-based Porta Advisors, noted that sharp duties like the ones faced by India and Switzerland should not come as a surprise.
“You just watch how Trump is treating neighbors, Canada, and then you can imagine all the rest. So welcome to this new world,” he told CNBC’s “Squawk Box Europe.”
Wittmann also weighed in on Switzerland, as it scrambles to lower its tariff rate.
“What should Switzerland do? Realize that we live in a world of policymakers and these other three superpowers — China, EU and the U.S., and all the rest — are in various degrees, takers,” he said.
“So the only thing you can do is short-term accommodate, be flexible, be adaptive. But you know, structurally, you have to become stronger yourself and more independent.”
