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Key takeaways from Washington's revised import tariffs

02 August 2025 22:13

US President Donald Trump's self-imposed trade deadline expired this week, putting in place a new trade landscape - one in which countries pay for the right to access the American market.

Since Trump announced "reciprocal" tariffs on countries around the world on April 2, nations have been negotiating with Trump administration officials on terms to reduce the tariff burden.

The new tariff rates announced this week, which will go into effect from August 7, are subject to change as trading partners finalise accords with Washington.

After months of hastily negotiations between Washington and other administrations in an attempt to bring down the threatened rates, who were the ultimate winners and losers? The following article presents five takeaways from Trump's trade negotiations presented by Nikkei Asia.

Trump & UK Emerge as trade war winners

“President Trump was a clear victor on reciprocal tariffs,” Wendy Cutler, vice president at the Asia Society Policy Institute, told Nikkei Asia. “Many important trading partners, including Japan, South Korea and the European Union, accepted terms in favour of the United States in order to continue their access to the US market and avoid even higher tariffs or counter-retaliation if no deal was struck.”

Jeff Mahon, a director at Canadian advisory firm StrategyCorp, agreed that the US gained the upper hand. “It used its market power and central position in the global economy to force lopsided deals and irregular concessions from other countries,” he said.

But Zongyuan Zoe Liu, a senior fellow for China studies at the Council on Foreign Relations, cautioned that it depends on how victory is defined.

“If we define winning as calming the self-inflicted turmoil in trade and financial markets, then rushing to conclude trade deals and postponing China tariffs for another 90 days could be defined as wins,” she said.

“But if we define wins as reaching deals so that manufacturing jobs can be relocated back to the United States, and through the trade deals, the committed investments can happen within the next four years during President Trump's administration, that argument would not be substantiated.”

Cutler, who previously served as deputy US Trade Representative, also pointed to the UK as a standout. “With a 10% reciprocal tariff and continued access to the US automotive market, the UK fared better than other trading partners,” she said. As the first country to finalise a deal with Trump, the UK managed to lower the proposed 25% auto tariffs by 15 percentage points, though the agreement includes a cap of 100,000 vehicles.

South Korea, Canada, and US consumers among losers

Cutler noted that America’s Free Trade Agreement partners, such as South Korea, emerged worse off. “South Korea and Japan now face the same tariff rate on autos,” both 15%, “eliminating Korea’s advantage of 2.5% under the FTA.”

Laos and Myanmar, meanwhile, were slapped with a 40% tariff—the second highest after Syria’s 41%—though the White House has not clarified how those rates were determined. Both nations’ textile and apparel exports are expected to take a hit.

Canada also came out poorly, said Kate Kalutkiewicz, a senior managing director for trade at McLarty Associates. “As the dust settles today, there is clearly one G7 partner standing alone, our friends to the north,” she said, noting Canada’s 35% tariff.

In the end, American consumers will bear the cost, warned David French, executive vice president for government relations at the National Retail Federation. Tariffs are initially paid by US importers. Unless exporters agree to shoulder some of the burden, those costs will inevitably be passed on to consumers.

US-China economic interdependence on display

Another key takeaway from the recent trade manoeuvring is China’s emerging leverage in rare earths.

“What we have seen is a fundamental change in the US-China trade relationship,” said Kalutkiewicz, who previously served as special assistant to the president and senior director for international trade during Trump’s first term. Initially, Trump aimed to stop unfair subsidies and forced tech transfers. Today, it’s a broader supply chain struggle, with rare earths on China’s side and tech export controls on America’s.

Chinese officials believe their approach is proving effective, said CFR’s Liu. “They have been demonstrating that they are different from other countries who rushed to Washington to reach a deal.”

Moreover, she noted, Trump’s actions have distracted from China’s own domestic economic issues. “For months, China had been blamed for international confusion and a lack of confidence in the trajectory of the economy. China today is credited for more stability and more certainty, with the US now seen to be ‘the creator of uncertainty.’”

USMCA review looms as next major test

One piece of the global trade puzzle that remained largely untouched is the US-Mexico-Canada Agreement (USMCA), the successor to NAFTA. Under this framework, automakers have built factories in Mexico and Canada, exporting vehicles to the US duty-free.

When Trump announced the 25% auto tariffs in March, he exempted USMCA signatories—applying the tariff only to the portion of vehicles not sourced from the US

“Despite Trump increasing tariffs on Canada to 35%, many Canadian businesses may be relieved as these tariffs continue to only cover goods not compliant with the USMCA,” said StrategyCorp’s Mahon.

A clause in the agreement requires a joint review six years after it took effect, meaning July 2026. Reports suggest discussions could begin as early as September.

Kalutkiewicz believes USMCA will survive the review but anticipates modifications. “It’s not going to stay exactly the same,” she said.

Tariffs here to stay

Experts say the current trajectory signals a permanent transformation in US trade policy.

“It’s a fundamental change,” said Kalutkiewicz. “I don’t think that America is going back. This is not a Trump phenomenon. What happened yesterday is a very dramatic shift away from the principles of the most-favoured-nation that the US espoused for so long at the World Trade Organization,” she said.

By Nazrin Sadigova

Caliber.Az
Views: 171

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