Trump's sweeping new tariffs take effect, fuelling global trade tensions

President Donald Trump’s punishing new tariffs on more than 90 countries snapped into place after the stroke of midnight Thursday, the latest escalation in a global trade war that has started to exact a toll on the US economy. 

Few of America’s major trading partners were spared under Trump’s updated slate of duties, which together have sent the average effective US tariff rate to its highest level in nearly a century. In the hours before the import taxes took effect, the president signaled there would be more to come, as he doubled down on a strategy that has rattled markets, driven up prices and spooked consumers and businesses around the world. 

Trump announced the new rates in a series of executive orders he signed last week, some of which formalised the preliminary trade agreements that he had reached in recent days with the European Union and other countries. The President has long maintained that these levies would help reset trade relationships that he deems unfair, raise new revenue for the US  government, spur more US manufacturing and achieve other goals. 

Trump’s tariffs have indeed helped generate money — roughly $152 billion in customs collections through July, recent data show — but his policies have not been without consequence. A growing number of businesses have warned recently that they may no longer be able to stomach the rising costs of key foreign components. 

As a result, prices have started to climb. The latest monthly measure of inflation showed that appliances, clothing and furnishings became more expensive in June. The economy has grown but at an anemic pace, and some analysts predict little improvement through the remainder of the year. The labor market has experienced its own strains, with hiring sharply slowing in July. 

Olu Sonola, the head of US economic research at Fitch Ratings, said the economy was just “starting to see” the effects of the tariffs that Trump announced in the spring, adding that with Trump’s newest duties now in place, Americans would “see that magnified” in coming months.  

The tariffs start at 15 percent, targeting imports from countries including Bolivia, Ecuador, Iceland and Nigeria. Others, like Taiwan, have a 20 percent tax applied to items sold to US buyers. Trump also imposed a much higher 50 percent tariff on some goods from Brazil. He has cast it as punishment for Brazil’s decision to prosecute his political ally Jair Bolsonaro, the country’s former president, for seeking to stay in power after losing an election. 

And on Wednesday, Trump said he would raise tariffs on India to 50 percent by late August for buying Russian oil. The president has signaled he could impose similar penalties on other countries, as he looks for ways to use trade policy to pressure Russia into halting its war against Ukraine. In general, the duties do not apply to foreign goods that have been loaded onto ships just before August 7.