President Donald Trump sent out tariff letters to six smaller U.S. trading partners on Wednesday with a pledge to announce import taxes on other countries later in the day.
None of the countries targeted in the first batch of letters — the Philippines, Brunei, Moldova, Algeria, Libya and Iraq — is a major industrial rival to the United States. It’s a sign that a president who has openly expressed his love for the word “tariff” is still infatuated with the idea that taxing trade will create prosperity for America.
Most economic analyses say the tariffs will worsen inflationary pressures and subtract from economic growth, but Trump has used the taxes as a way to assert the diplomatic and financial power of the U.S. on both rivals and allies.
Officials for the European Union, a major trade partner and source of Trump’s ire on trade, said Tuesday that they are not expecting to receive a letter from Trump listing tariff rates. The Republican president started the process of announcing tariff rates on Monday by hitting two major U.S. trading partners, Japan and South Korea, with import taxes of 25%.
According to Trump’s letters, imports from Libya, Iraq and Algeria would be taxed at 30%, those from Moldova and Brunei at 25% and those from the Philippines at 20%. The tariffs would start Aug. 1.
The Census Bureau reported that last year U.S. ran a trade imbalance on goods of $1.4 billion with Algeria, $5.9 billion with Iraq, $900 million with Libya, $4.9 billion with the Philippines, $111 million with Brunei and $85 million with Moldova. The imbalance represents the difference between what the U.S. exported to those countries and what it imported.
Taken together, the trade imbalances with those six countries are essentially a rounding error in a U.S. economy with a gross domestic product of $30 trillion.
The letters were posted on Truth Social after the expiration of a 90-day negotiating period with a baseline levy of 10%. Trump is giving countries more time to negotiate with his Aug. 1 deadline, but he has insisted there will be no extensions for the countries that receive letters.
Maros Sefcovic, the EU’s chief trade negotiator, told EU lawmakers in Strasbourg, France, on Wednesday that the EU had been spared the increased tariffs contained in the letters sent by Trump and that an extension of talks until Aug. 1 would provide “additional space to reach a satisfactory conclusion.”
Trump on April 2 proposed a 20% tariff for EU goods and then threatened to raise that to 50% after negotiations did not move as fast as he would have liked, only to return to the 10% baseline.
Source: AP
--Agencies
