Since his return to the White House in January 2025, Donald Trump has reignited the trade war, creating unprecedented instability in global commerce. With contradictory announcements, constant changes in tariffs, and uncertain negotiations, his Administration has plunged the market into a climate of uncertainty. Although the deadline to reach a global agreement expired on August 1, the United States decided to postpone the implementation of the new tariffs. However, the measures announced by the president last week began to take effect shortly after midnight.
TRUMP PUNISHES BRAZIL WITH A 400% INCREASE DUE TO BOLSONARO
Brazil has been one of the most affected countries by the recent tariff increases, jumping from a rate of 10% to 50% in just three months, which came into effect on Wednesday, August 6. This 400% increase represents the highest among the 210 countries to which President Trump has imposed specific tariffs. Brazil leading the list points more towards political reasons than economic ones. On July 10, Trump sent a letter to his Brazilian counterpart openly criticizing the treatment given to former President Jair Bolsonaro —one of his closest allies— currently under house arrest after being accused of alleged conspiracy for a coup.
In response, the Government of Lula da Silva filed a lawsuit with the World Trade Organization on the same Wednesday in response to the surcharges on Brazilian products. This entity aims to ensure that countries comply with trade agreements and that measures deemed incompatible can be challenged.
But the South American country is not the only one that has seen an increase in tariffs since the first announcement by the White House. Countries like Afghanistan, Bolivia, Ecuador, Turkey, New Zealand, or Iceland have experienced a 50% increase in just three months. During the 'Liberation Day', Trump announced a 10% for these countries, but with the update on August 1, they ended up at 15%.
However, when analyzing the changes announced by the White House, the increase in rates is not what Trump has imposed the most. Since the start of his trade war in the spring, what he has mostly done is maintain the same tariff unchanged for most of the mentioned countries. More than half of the states have not experienced changes between the announced tariff in April and that of August, as is the case with Venezuela (15%), United Kingdom, Australia, United Arab Emirates, or Morocco, all at 10% which remains exactly the same.
On the other hand, a third of the countries have seen a decrease in their tariffs, among which stand out South Korea and Japan (from 25% to 15%), Cambodia (from 49% to 19%), Indonesia (from 32% to 19%), Vietnam (from 46% to 20%), or the European Union and its 27 member states (from 20% to 15%), even though on Tuesday Trump threatened the EU with a 35% tariff if they do not invest the agreed money with the United States.
CHINA STANDS FIRM AS TRUMP THREATENS THE EUROPEAN UNION
Over the past three months, the world has witnessed how Trump's risky trade policy has shaken global financial markets. Since then, there have only been extensions and constant negotiations between the US and the affected countries with the aim of reaching a common agreement.
The European Union is one of the main trading partners of the United States. On July 27, Ursula von der Leyen, President of the European Commission, and Trump met in Scotland with the goal of avoiding a trade war. After an hour-long meeting, they reached an agreement: Trump would reduce the tariffs on exports from the Twenty-Seven from 20% to 15%, and they would buy energy from the North American country worth $750 billion. In addition to investing an additional $600 billion in the country over the next three years, purchasing more US military equipment, and lifting the retaliatory tariffs imposed by the EU on certain imports such as soybeans or whiskey from the US, which Brussels announced in March in response to Trump.
However, Trump soon threatened to impose a 35% tariff on the European bloc if they do not invest the agreed amount. On August 5, the US president issued his ultimatum. During an interview on CNBC, he referred to the agreed amount as a "gift" with which his government "can invest in whatever it wants."
A similar situation occurred with South Korea and Japan who, after weeks of negotiations, managed to reduce their percentage (from 25% to 15%) in exchange for billions of dollars in investments.
Meanwhile, China continues to stand firm against Trump in their trade war. In April, the Asian giant faced a 54% tariff. The White House announced a 34% increase, adding to the existing 20% surcharge, but after months of negotiations, China agreed to a 30% reduction and a 90-day truce for the implementation of the tariff, despite having the largest deficit with the US. This truce represents a pause in the significant tariff escalation that had been occurring since April, a period during which Trump had raised Chinese tariffs to 145%.
INDIA PENALIZED FOR RUSSIAN OIL AND MEXICO ACHIEVES A TRUCE
Meanwhile, Canada and Mexico, partners with the United States in the USMCA - an economic agreement that allows most Canadian and Mexican products entering the US to be exempt from customs duties - met this week to strengthen their relationship in the face of the over 30% tariff offensive that Trump had imposed on exports not covered by the free trade agreement.
On August 1, Mexico obtained a 90-day truce for the 30% tariff imposed by Trump to not be applied until October, thus extending the negotiation time. However, while the Mexican government achieved a postponement, Canada not only did not obtain this economic relief but the White House increased the tariff rate from 25% to 35%.
Another issue open this week is what would happen to countries buying products from Russia. The response came on Wednesday, August 6, when the United States announced an executive order to impose an additional 25% tariff on India as retaliation for the purchase of Russian oil. Thus, the total duty on Indian imports would rise to 50% and will take effect on August 27.
TARIFFS ON PHARMACEUTICALS HIT EUROPE
Trump's trade war not only targets specific countries but also certain products severely affected, regardless of their origin, such as steel and aluminum. By mid-March, a 25% tariff was already in place on both materials, which increased to 50% in June.
What did come into effect on the date set on Trump's calendar of August 1 was the increase in imports of products made and semi-finished with copper to 50%. Sales of refined metal will not be affected.
On the other hand, certain taxes remain, such as the 25% on the automotive sector - applying to all vehicles and parts manufactured outside the North American country - a measure that will have a significant impact on Germany, one of the main European manufacturers.
During Tuesday's interview, in which Trump threatened the European Union, he also announced that he would impose a moderate initial tariff on pharmaceutical companies, but warned that he could increase it to 150%, and even raise it to 250%, within a maximum period of a year and a half. Europe will be the region most affected by this increase: Ireland is the largest purchaser of medicines from the US, followed by Germany and Switzerland. The latter country will be particularly hard hit, as the United States is its main pharmaceutical market and it already faces a 39% tariff due to a bilateral trade deficit of $48 billion.
But if Europe is the main loser in the pharmaceutical sector, Asia is the main loser in the sale of chips and semiconductors. Although the US president said he would announce the new tariffs on this technology sector next week, the announcement was brought forward to Wednesday when he imposed a 100% tariff to force them to be manufactured in his country. This tariff measure will mainly affect Vietnam, Thailand, and Malaysia.
The constant tariff changes by the White House have created great uncertainty globally. August 1 was the day announced by Trump for these measures to take effect, but the Oval Office decided to postpone their implementation for another week, until Thursday, August 7, when they were finally implemented.