Trade War: Trump Revives Tariffs Against Around Sixty Countries

The markets will ultimately not have the hoped-for calm. As the temporary tariffs imposed 150 days ago were set to expire, Donald Trump chose to reignite the trade war by announcing, this Friday, a new wave of taxes targeting around sixty economies. Presented as a response to forced labor in certain supply chains, this offensive goes far beyond the realm of trade. It rekindles tensions between the United States, China, and the European Union, while fueling a new phase of volatility in financial markets and alternative assets.

In Brief

• Donald Trump is imposing surcharges of 10% to 12.5% starting this Friday, targeting around sixty economies as the temporary measures from February expire.
• The U.S. administration is relying on an investigation aimed at eliminating products resulting from forced labor from global supply chains.
• Beijing condemns the unilateral measure as harmful to global trade, supported by strong criticism from Australia, New Zealand, and Japan.
• Brussels welcomes the maintenance of surcharges below 15%, in accordance with the Turnberry agreement signed last year.

A Targeted Tariff Offensive Under the Guise of Social Standards

This new measure immediately took over the temporary 10% taxes imposed last February for a duration of 150 days, which expired at the same time. A grace clause has been provided for products in transit, which will escape this taxation if they arrive at their destination before July 28. Thus, a differentiation of rates is observed:

• The 10% surcharge: it applies to partners with legislation deemed incomplete by Washington, notably the European Union, the United Kingdom, Mexico, or Canada;
• A 12.5% surcharge: it affects around forty other nations, including China, Japan, Switzerland, or South Korea;
• Only energy and raw materials not produced on U.S. soil are exempt from this new tax regime.

The U.S. administration relies on an investigation conducted since mid-March by the White House Trade Representative (USTR), Jamieson Greer, concerning the elimination of products resulting from forced labor. On CNN, Jamieson Greer firmly justified the administrative approach: we are seeking to end the trade of such products. If you allow the import of goods resulting from forced labor, it creates unfair competition against your own products. We want all countries to have the same type of protections. This approach fits into a logic of continuous pressure on the United States' trading partners.

Greta Peisch, an attorney specializing in international trade, emphasizes that the goal is to keep the upper hand and maintain pressure so that countries continue to apply the trade agreements that have been signed, and perhaps negotiate others in the future. There is this common thread, even if the tariffs vary greatly and change justification in the meantime.

Between Chinese Retaliation and European Respite

Global diplomatic reactions immediately illustrated the fracture caused by this announcement. In Asia, Australia described these new barriers as unjustified, Wellington deemed them extremely disappointing, and Tokyo expressed its regret. China, an influential member of the BRICS bloc, hit by the 12.5% tariff, voiced strong opposition during a press conference held by Lin Jian, spokesperson for the Chinese Ministry of Foreign Affairs: we oppose any form of unilateral measures regarding tariffs. A tariff war or a trade war does not serve the interests of any party. This heightened tension comes despite the truce reached last October between Washington and Beijing, amid ongoing disputes over U.S. restrictions on technology exports.

In contrast, the European Union welcomed the news with evident relief. Olof Gill, spokesperson for the European Commission, stated that the EU is pleased that this outcome aligns with U.S. commitments on tariffs, with the 10% rate applied respecting the 15% ceiling negotiated a year earlier in Turnberry, Scotland, and alleviating fears of escalation related to the recent fine imposed on tech giant Google.

Bilateral Escalation and Global Macroeconomic Impact

Alongside this global offensive, the White House continues a strategy of sanctions targeting specific partners while preparing new legal cartridges. Brazil has been subject to a 25% tariff since Wednesday, affecting nearly half of its exports to the world's largest economy, while Canada faces an additional 50% surcharge set to take effect in a month.

The U.S. government now favors selective targeting of goods rather than a blind taxation of all imports. Furthermore, the Office of the Trade Representative is conducting other investigations based on the same legal grounds targeted by the Supreme Court, particularly regarding potential foreign industrial overcapacity, a process that once again threatens the European Union.

From a macroeconomic and financial perspective, the establishment of these permanent tariff barriers undermines traditional supply chains and revives the risk of a global inflationary surge. By restricting the fluidity of global trade and intensifying protectionism, this policy forces economic actors to reassess their capital allocations.