Brazil, China and India will be the top three countries that are set to see the most benefits from Donald Trump’s new 15% tariffs, according to data analysis cited by the Financial Times.
The data shows that countries, which have been singled out by the US President for heavy criticism will see the largest benefits from the global flat rates.
As per the report, an analysis of the new US tariff regime by independent trade monitoring body Global Trade Alert showed that Brazil will see the biggest fall in average tariff rates, falling by 13.6 percentage points. China comes next, enjoying a 7.1 percentage point reduction, while India will see its tariff fall by around 6 percentage points.
Donald Trump had originally in January last year implemented the International Emergency Economic Powers Act (IEEPA) to impose the US tariffs on the country’s trade partners. However, a majority ruling of the Supreme Court last week struck down these actions.
Right after the court invalidated these tariffs as illegal, Trump vowed to impose a 10% global flat rate to replace the IEEPA tariffs, which he further increased to the maximum limit of 15% on Saturday. The new Trump tariffs are due to come into force on Tuesday but have a validity of only 150 days before the Congress gives any further nod.
Other Asian manufacturers to benefit
According to Johannes Fritz, economist and GTA chief executive who conducted the analysis, Asian manufacturers that have been frequently criticised by Trump including Vietnam, Thailand and Malaysia for their huge trade surplus with the US will also reap the benefits of the 15% flat tariff rates.
Items like clothing, furniture, toys and plastics that make up their manufacturing base will do particularly well, Fritz was cited as saying by FT.
“Countries including China, Brazil, Mexico and Canada that were most bitterly criticised by the White House and targeted with IEEPA tariffs under special executive orders have seen their tariffs fall the most,” Fritz was quoted as saying by FT.
However, he warned that the future for all tariffs was now clouded in uncertainty, with the Trump administration indicating that it would impose additional country-specific measures under Section 301 of the 1974 Act.
“This regime is potentially only 150 days. The administration has signalled that it will now focus on statutes that do allow them to impose tariffs, so in practice the game now begins anew,” he said.
Brazil and China are already being investigated by the US under the section.
US trade representative vows action
In an interview on Sunday with CBS, US Trade Representative Jamieson Greer defended the new tariffs and vowed to move ahead with the Section 301 investigations
“We don’t have the same flexibility that IEEPA gave us” but “we’re going to conduct investigations that can allow us to impose tariffs if it’s justified by the investigation”, Greer told CBS. “So we expect to have continuity in the present tariff programme.”
He said Trump used the maximum limit because “the urgency of the situation demands that he uses full authority”.
Greer said that he had been talking to trade partners like EU where deals had already been struck and none of them said “the deal is off”.
“I’ve been telling them for a year [that] whether we won or lost [in court], we were going to have tariffs . . . That’s why they signed these deals, even while the litigation was pending,” he said.
Key Takeaways
- Trump’s new tariffs could inadvertently benefit countries he’s criticized the most.
- Brazil, China, and India will experience significant reductions in tariff rates.
- The future of tariffs remains uncertain, with potential for new country-specific measures.