US trade partners around the world were reacting today to President Donald Trump’s executive order that would introduce new tariffs on many of them in seven days — as the global economy and alliances face a fresh test from the president’s trade agenda.
Trump’s order was issued today after a flurry of tariff-related activity in recent days, as the White House announced agreements with various nations and blocs ahead of Trump’s self-imposed August 1 deadline.
Trump also said he would be extending trade negotiations with Mexico for 90 days. But the vast majority of nations are continuing to face uncertainty ahead of the coming deadline. And while a handful of trade deals have trickled in, many details remain hazy — with businesses and manufacturers around the world bracing for heightened operating costs and potential price hikes regardless.
Meanwhile, Trump’s overhaul of American trade policy hasn’t gone unchallenged. Appellate court judges have expressed broad scepticism around Trump’s legal rationale for his most expansive round of tariffs.
Trump orders 35% tariff on Canada, citing illicit drug trade
Trump has raised the tariff rate on US imports from Canada to 35% from 25%, effective next Friday.
The announcement from the White House said Canada had failed “to do more to arrest, seize, detain, or otherwise intercept drug trafficking organisations, other drug or human traffickers, criminals at large, and illicit drugs”.
Trump earlier had threatened to impose the higher tariff on Canada if no deal was reached by today, his deadline for reaching trade agreements with dozens of countries.
Canada was not included in Trump’s updated list of tariff rates on other countries announced today. Those import duties are due to take effect on August 7.
Malaysia hails ‘significant achievement’ in 19% tariff
Malaysia’s Trade Ministry said today that the US tariff reduction from 25% to 19% was a “significant achievement” as the deal was struck without compromising key national interests.
“The 19% rate roughly tracks the rate of other countries in the Southeast Asian region,” the ministry said in a statement. “Most importantly, Malaysia had stood firm on various ‘red line’ items, and the 19% tariff rate was achieved without compromising the nation’s sovereign right to implement key policies to support the nation’s socio-economic stability and growth.”
The ministry said that Malaysia’s economy remains resilient despite global headwinds, citing strong domestic demand and ongoing structural reforms.
The statement didn’t give further details but officials previously said non-tariff barriers such as halal certification, which affects US beef and poultry exports, along with digital trade and government procurement were sticky points. It’s unclear what concessions Malaysia made.
Cambodia hit with 19%, says thank you to Trump
Cambodia’s Deputy Prime Minister Sun Chanthol, who led his nation’s trade talks with the US, thanked Trump for setting the tariff rate on Cambodian goods at 19% and said his country will impose zero tariffs on all American goods.
When Washington originally posted its list of notional “reciprocal” tariffs, the rate for goods from Cambodia was 49%, one of the highest in the world. It had estimated that Cambodian tariffs on US imports averaged 97%.
Sun Chanthol also said Cambodia would purchase 10 passenger aircraft from Boeing in a deal they hoped to sign later this month. Several other nations had already announced similar aircraft purchase deals as part of their trade packages.
Trump had threatened to not conclude a deal with reduced tariffs if Cambodia and Thailand did not stop a recent armed conflict over border territory. The two nations agreed on a ceasefire beginning Wednesday that appears to be holding.
Cambodia publicly celebrated Trump’s peace initiative, suggesting he deserved a Nobel Prize for his intervention. Sun Chanthol said today that Cambodia would nominate him for the honour.
Prime Minister Hun Manet expressed his thanks to Trump for the dropping of tariffs from 36% to 19% and he called the reduction “good news” for Cambodia.
Posted on his social media platform, Hun Manet said Trump had not only helped broker a ceasefire between Cambodia and Thailand forces after nearly a weeklong clash but also helped Cambodia’s economy by lowering tariffs.
“This is good news for the people and economy of Cambodia to continue developing the country,” Hun Manet said.
Australia’s 10% is vindication of ‘cool and calm negotiations’
Australian Trade Minister Don Farrell says gaining the minimum US tariff on exports including beef, lamb, wine and wheat gave Australia a competitive advantage over some competitors.
Farrell told reporters Australia did not introduce tariffs on US goods at any point, and added, “I haven’t seen any case or any example where the retaliatory imposition of tariffs has resulted in a country being in a better position.”
Farrell argues that no US tariffs can be justified because Australia imposes no tariffs on its bilateral free trade partner. The United States has enjoyed a trade surplus with Australia for decades.
Australian Prime Minister Anthony Albanese has been criticised for failing to secure a face-to-face meeting with Trump to discuss trade.
Japan welcomes 15% as an ease in uncertainty
Japanese Chief Cabinet Secretary Yoshimasa Hayashi welcomed Trump’s signing of the executive order setting Japan’s new reciprocal tariffs as a step that would reduce uncertainty of the US trade policy and its negative impact on the global economy, including that of Japan.
Hayashi, however, said Japan still needs to closely examine the measures and continue urging prompt implementation by the US government to carry out the agreement, including reduction of tariffs on automobiles and auto parts.
Hayashi acknowledged that Japan’s new tariff rate of 15% is a “major reduction” from the initially imposed 25%, but his government will continue to watch and mitigate its impact on Japanese exports, including by providing financial assistance for small and medium-sized businesses.
New Zealand looks to lobby for lower tariff rates
US President signs an executive order for new tariffs on a wide swath of US trading partners to go into effect in seven days. (Source: 1News)
New Zealand officials said they would lobby the administration for a change to the 15% tariff announced for the country’s exporters to the US. It’s an increase from the original 10% baseline announced for New Zealand in April.
“We don’t think this is a good thing. We don’t think it’s warranted,” Trade Minister Todd McClay told RNZ today. He said New Zealand appeared to have been targeted for a larger levy because the country records a trade deficit with the US but that the gap of about half a billion dollars each year was “not significant or meaningful”.
Neighbouring Australia dodged an increase to remain at 10%, but it records a trade surplus with the US, McClay added.
The United States in January overtook Australia to become New Zealand’s second-largest export partner, behind China. New Zealand exports are largely made up of meat, dairy, wine and agricultural machinery.
Taiwan president says final negotiations to come after 20% tariff
Taiwan President Lai Ching-te said Taiwan had yet to engage in final negotiations with the US owing to scheduling difficulties and that he was hopeful the final tariff rate would be reduced even further after a final round of talks.
The Trump administration hit Taiwan with 32% tariffs, and lowered it to 20%. Taiwan was notified yesterday by the administration of the lower rate.
“Twenty per cent from the beginning has not been our goal. We hope that in further negotiations we will get a more beneficial and more reasonable tax rate,” he told reporters in Taipei today.
Lai also linked trade talks to security issues, as the US is Taiwan’s largest ally even though it does not formally recognise the island. “We want to strengthen US-Taiwan cooperation in national security, tech, and multiple areas,” he said.
The US is Taiwan’s most important export market and strategic ally, Lai said in an earlier statement this morning.
Thailand successfully negotiates lower tariff of 19%
Thailand’s government spokesperson Jirayu Houngsub said Thailand says the US agreed to reduce the tariffs rate from 36% to 19%, a rate similar to those imposed on many other Southeast Asian countries such as Vietnam and the Philippines.
“It’s one of the major successes of Team Thailand in a win-win approach, to secure the country’s export base and economic security in a long run,” he said in a statement. He didn’t immediately say what was the latest offer Thailand made to the US.
The agreement came days after a ceasefire between Thailand and Cambodia to halt the nearly weeklong clashes that killed at least 41 people. It was brokered with US pressure as Trump said he would not move forward with trade agreements if the conflict continued.