Trump hits dozens of countries with steep tariffs, including 35% for Canadian goods

US President Donald Trump slapped dozens of trading partners with steep tariffs ahead of a Friday (Aug 1) trade deal deadline, including a 35 per cent duty on many goods from Canada, 50 per cent for Brazil, 25 per cent for India, 20 per cent for Taiwan and 39 per cent for Switzerland.

Trump released an executive order listing higher import duty rates of 10 per cent to 41 per cent starting in seven days for 69 trading partners as the 12.01am EDT (12.01pm in Singapore Time) deadline approached. Some of them had reached tariff-reducing deals and some had no opportunity to negotiate with his administration.

The order said that goods from all other countries not listed in an annex would be subject to a 10 per cent US tariff rate.

Trump's order said that some trading partners, "despite having engaged in negotiations, have offered terms that, in my judgement, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters."

Trump issued a separate order for Canada that raises the rate on Canadian goods subject to fentanyl-related tariffs to 35 per cent from 25 per cent previously, saying Canada had "failed to co-operate" in curbing fentanyl flows into the US.

The higher tariffs on Canadian goods contrasted sharply with Trump's decision to grant Mexico a 90-day reprieve from higher tariffs of 30 per cent on many goods to provide more time to negotiate a broader trade pact.

A US official told reporters that more trade deals were yet to be announced as Trump's higher "reciprocal" tariff rates were set to take effect.

"We have some deals," the official said. "And I don't want to get ahead of the President of the United States in announcing those deals."

Regarding the steep tariffs on goods from Canada, the second largest US trading partner after Mexico, the official said that Canadian officials "haven't shown the same level of constructiveness that we've seen from the Mexican side."

The extension for Mexico avoids a 30 per cent tariff on most Mexican non-automotive and non-metal goods compliant with the US-Mexico-Canada Agreement on trade and came after a Thursday morning call between Trump and Mexican President Claudia Sheinbaum.

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"We avoided the tariff increase announced for tomorrow," Sheinbaum wrote in an X social media post, adding that the Trump call was "very good."

Approximately 85 per cent of US imports from Mexico comply with the rules of origin outlined in the USMCA, shielding them from 25 per cent tariffs related to fentanyl, according to Mexico's economy ministry.

Trump said the US would continue to levy a 50 per cent tariff on Mexican steel, aluminium and copper and a 25 per cent tariff on Mexican autos and on non-USMCA-compliant goods subject to tariffs related to the US fentanyl crisis.

"Additionally, Mexico has agreed to immediately terminate its Non Tariff Trade Barriers, of which there were many," Trump said in a Truth Social post without providing details.

Korea deal, India discord

South Korea agreed on Wednesday to accept a 15 per cent tariff on its exports to the US, including autos, down from a threatened 25 per cent, as part of a deal that includes a pledge to invest US$350 billion (S$453 billion) in US projects to be chosen by Trump.

But goods from India appeared to be headed for a 25 per cent tariff after talks bogged down over access to India's agriculture sector, drawing a higher-rate threat from Trump that also included an unspecified penalty for India's purchases of Russian oil.

Although negotiations with India were continuing, New Delhi vowed to protect the country's labour-intensive farm sector, triggering outrage from the opposition party and a slump in the rupee.

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Trump's rollout of higher import taxes on Friday comes amid more evidence they have begun driving up consumer goods prices.

Commerce Department data released Thursday showed prices for home furnishings and durable household equipment jumped 1.3 per cent in June, the biggest gain since March 2022, after increasing 0.6 per cent in May. Recreational goods and vehicles prices shot up 0.9 per cent, the most since February 2024, after being unchanged in May. Prices for clothing and footwear rose 0.4 per cent.

Tough questions from judges

Trump hit Brazil on Wednesday with a steep 50 per cent tariff as he escalated his fight with Latin America's largest economy over its prosecution of his friend and former President Jair Bolsonaro, but softened the blow by excluding sectors such as aircraft, energy and orange juice from heavier levies.

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The run-up to Trump's tariff deadline was unfolding as federal appeals court judges sharply questioned Trump's use of a sweeping emergency powers law to justify his sweeping tariffs of up to 50 per cent on nearly all trading partners.

Trump invoked the 1977 International Emergency Economic Powers Act to declare an emergency over the growing US trade deficit and impose his "reciprocal" tariffs and a separate fentanyl emergency.

The Court of International Trade ruled in May that the actions exceeded his executive authority, and questions from judges during oral arguments before the US Appeals Court for the Federal Circuit in Washington indicated further scepticism.

US Treasury Secretary Scott Bessent said earlier that the United States believes it has the makings of a trade deal with China, but it is "not 100 per cent done," and still needs Trump's approval.

US negotiators "pushed back quite a bit" over two days of trade talks with the Chinese in Stockholm this week, Bessent said in an interview with CNBC.

China is facing an August 12 deadline to reach a durable tariff agreement with Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end escalating tit-for-tat tariffs and a cut-off of rare earth minerals.

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