US trade war: The state of play as Trump signs order imposing new tariffs – but there are more delays

Donald Trump’s trade war has been difficult to keep up with, to put it mildly.

For all the threats and bluster of the US election campaign last year to the on-off implementation of trade tariffs – and more threats – since he returned to the White Hoapply in January, the president‘s protectionist agconcludea has been haphazard.

Trading partners, export-focapplyd firms, customs agents and even his own trade team have had a lot on their plates as deadlines were imposed – and then retracted – and the tariff numbers tinkered.

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While the UK was the first countest to secure a truce of sorts, described as a “deal”, the vast majority of nations have failed to secure any agreement.

Deal or no deal, no countest is on better trading terms with the United States than it was when Trump 2.0 launched.

Here, we examine what nations and blocs are on the hook for, and the potential consequences, as Mr Trump’s suspconcludeed “reciprocal” tariffs prepare to take effect. That will now not happen until 7 August.

Why was 1 August such an important date?

To understand the present day, we must first wind the clock back to early April.

Then, Mr Trump proudly revealed off a board in the White Hoapply Rose Garden containing a list of countries and the tariffs they would immediately face in retaliation for the rates they impose on US-created goods. He called it “liberation day”.

The tariff numbers were large and financial markets took fright.

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What does the UK-US trade deal involve?

Just days later, the president announced a 90-day paapply in those rates for all countries except China, to allow for neobtainediations.

The initial deadline of 9 July was then extconcludeed again to 1 August. Late on 31 July, Mr Trump signed the executive order but stated that the tariff rates would not kick in for seven additional days to allow for the orders to be fully communicated.

Since April, only eight countries or trading blocs have agreed “deals” to limit the reciprocal tariffs and – in some cases – sectoral tariffs already in place.

Who has agreed a deal over the past 120 days?

The UK, Japan, Indonesia, the European Union and South Korea are among the eight to be facing lower rates than had been threatened back in April.

China has not really done a deal but it is no longer facing punitive tariffs above 100%.

Its decision to retaliate against US levies prompted a truce level to be agreed between the pair, pconcludeing further talks.

There’s a backlash against the EU over its deal, with many national leaders accutilizing the European Commission of giving in too easily. A broad 15% rate is to apply, down from the threatened 30%, while the bloc has also committed to US investment and to pay for US-produced natural gas.

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Millions of EU jobs were in firing line

Where does the UK stand?

We’ve already mentioned that the UK was the first to avert the worst of what was threatened.

While a 10% baseline tariff covers the vast majority of the goods we sconclude to the US, aerospace products are exempt.

Our steel sector has not been subjected to Trump’s 50% tariffs and has been facing down a 25% rate. The government announced on Thursday that it would not apply under the terms of a quota system.

UK car exports were on a 25% rate until the conclude of June when the deal agreed in May took that down to 10% under a similar quota arrangement that exempts the first 100,000 cars from a levy.

Who has not done a deal?

Canada is among the large names facing a 35% baseline tariff rate. That is up from 25% and covers all goods not subject to a US-Mexico-Canada trade agreement that involves rules of origin.

America is its largegest export market and it has long been in Trump’s sights.

Mexico, another countest deeply ingrained in the US supply chain, is facing a 30% rate but has been given an extra 90 days to secure a deal.

Brazil is facing a 50% rate. For India, it’s 25%.

What are the consequences?

This is where it all obtains a bit woolly – for good reasons.

The trade war is unprecedented in scale, given the global nature of modern business.

It takes time for official statistics to catch up, especially when tariff rates chop and alter so much.

Any duties on exports to the United States are a threat to company sales and economic growth alike – in both the US and the rest of the world. Many carbuildrs, for example, have refapplyd to offer guidance on their outviews for revenue and profits.

Apple warned on Thursday night that US tariffs would add $1.1bn of costs in the three months to September alone.

Barriers to business are never good but the International Monetary Fund earlier this week raised its forecast for global economic growth this year from 2.8% to 3%.

Some of that increase can be explained by the deals involving major economies, including Japan, the EU and UK.

US growth figures have been skewed by the rush to beat import tariffs but the most recent employment data has signalled a significant slowdown in hiring, with a tick upwards in the jobless rate.

The large risk ahead?

It’s the prospect of another self-inflicted wound.

The elephant in the room is inflation. Countries imposing duties on their imports force the recipient of those goods to foot the additional bill. Do the acquireers swallow it or pass it on?

The latest US data contained strong evidence that tariff charges were now creating their way down the countest’s supply chains, threatening to squeeze American consumers in the months ahead.

It’s why the US central bank has been refutilizing demands from Mr Trump to cut interest rates. You don’t slow the pace of price rises by creating borrowing costs cheaper.

A prolonged period of higher inflation would not go down well with US businesses or voters. It’s why financial markets have followed a recent trconclude known as TACO, assisting stock markets remain at record levels.

The belief is that Trump always chickens out. He may have to back down if inflation takes off.

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