It’s not just Switzerland that suffers

“Billions of dollars in customs duties are now flocking to the United States,” said Donald Trump while his surcharges were in force for dozens of countries. But not all of them undergo the same treatment.

The new American customs duties on products from dozens of savings became effective on Thursday, sketching the new world commercial order wanted by Donald Trump. These surcharge, entered into force at 06:01, a week after the signing of the decree by the American president, replace, for the savings concerned, that of 10% applied since April on almost all the products entering the United States.

According to the American president, it is a question of rebalancing the exchanges between the United States and its partners, which “benefit” from the first economic power.

These surcharges are in a large fork, between 15% and 41%. The European Union (EU), Japan or South Korea, which are among the main trade partners of the United States, are now affected by a rate of at least 15%.

Before the entry into force of these new taxes, the average effective rate applied to products entering the country was 18.4%, the highest since 1933, according to the LAB budget research center of Yale University. This additional increase should bring this rate to almost 20%, according to analysts from Pantheon Macroeconomics. This would make it the highest since the early 1930s, according to the LAB budget.

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And new announcements should follow, since the White House tenant also wishes to tax imported pharmaceuticals and semiconductors. The latter, as well as the chips, should be applied a 100%tax, he said on Wednesday, without further details.

Mexico, rare exception

Some countries have tried until the last moment to bring the Americans back to their decision, like Switzerland, struck by a punitive rate of 39%. Helvet President Karin Keller-Sutter and her Minister of Economy, Guy Parmelin, returned Thursday morning from a last chance mission to Washington to carry out final negotiations.

For the time being, while the American government assured that “dozens of agreements” would be signed in recent months, just seven have materialized, in particular with the European Union, Japan or the United Kingdom. These are most often pre-agrees, which must be formalized, accompanied by promises of massive investments in the United States from the countries or blocks concerned.

Rare exception, Mexico has escaped new increases. President Trump has extended the customs conditions from 90 days from 90 days from which he currently benefits, namely 25% on products entering the United States outside the North American free trade agreement.

The truce in the trade war with China also remains in force, the first two world economies having granted last month on the maintenance of a price break in order to continue their negotiations: additional American customs duties on Chinese products are temporarily fixed at 30%, while Chinese taxes on American imports remain at 10%.

On the other hand, the time is not for relaxation with Canada, which saw on August 1 increase the surcharge applied to its products, to 35%. Canadian minister, Mark Carney, however put their impact on it, believing that more than 85% of exports to his neighbor were not affected.

India and Brazil in the crosshairs

The Trump administration is particularly firm with certain countries. Donald Trump thus signed a decree imposing 50% of customs surcharge last week in Brazil, which came into force on Wednesday. Again, the many exceptions make that less than 35% of the products are affected, according to Brasilia.

This surcharge acts for Donald Trump reprisals against the prosecution targeting ex-president Jair Bolsonaro, his far-right ally, accused of having tried a coup after his defeat in the 2022 election.

India must deal with customs duties of 25%, which will spend in three weeks to 50% over a certain number of products, Donald Trump accusing New Delhi the lack of opening of his economy and his Russian oil purchases under sanction.

Concern for economists

The countries are nevertheless beginning to adapt: Brazil, which has filed a complaint before the World Trade Organization (WTO), wants to help its companies to diversify their outlets.

President Trump praised the merits of the agreements already concluded, which inflates the public revenues of a largely indebted economy. The impact of customs duties, however, continues to worry economists, who see them feed inflation – up in June 2.6% – with the risk of slowing growth, which should not exceed 1% in annualized pace in the second half, according to forecasts. (JZS/ATS)