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Sweeping tariffs unveiled by US President Donald Trump on Wednesday are set to have implications for countries across the world, as well as many markets and industries.
The tariffs announced on Trump’s so called “Liberation Day” are claimed to address “underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and US trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual US goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States.”
It comes after Trump in February had signed signed a Presidential Memorandum entitled “Reciprocal Trade and Tariffs,” that directed further review of our trading partners’ non-reciprocal trading practices. China had responded with its own tariffs against US goods.
Trump’s tariff list
The countries impacted by Trump’s tariffs are as follows.
Those in the baseline 10 percent tariffs include the United Kingdom; Singapore; Brazil; Australia; New Zealand; Turkey; Colombia; Argentina; El Salvador; United Arab Emirates; and Saudi Arabia.
But Trump has also imposed stiffer tariffs on what White House officials called the “worst offenders,” which go into effect on 9 April. These countries allegedly charge higher tariffs on US goods.
Countries facing stiffer tariffs include the European Union (20 percent tariff); China (54 percent, including previously announced tariffs); Vietnam (46 percent tariff); Thailand (36 percent tariff); Japan (24 percent tariff); Cambodia (49 percent tariff); South Africa (30 percent tariff); and Taiwan (32 percent tariff).
There are no additional tariffs on Canada and Mexico, as both countries have already been subjected to a 25 percent tariff by Trump.
And last week the US president had also announced new import tariffs of 25 percent on all cars and car parts coming into the US.
Tech implications
So what will be the implications of Trump’s tariffs on the tech sector?
Well news of the tariffs has already sent stocks nosediving in trading around the world.
The biggest tech impact of the tariffs could be on Amazon’s e-commerce operation, as it sells many goods manufactured in China and other countries. A
Amazon’s share price is currently down 5.16 percent at $196.01.
And it should be noted that in addition to the sweeping tariffs, Trump also signed an executive order on Wednesday ending a trade loophole for packages from China and Hong Kong that allows American consumers to directly import goods to the US valued under $800 without paying anything.
The so called de minimis exemption had been used by the Chinese shopping giants Shein and Temu to send millions of packages to the US each year duty-free, helping keep the prices of their products low for Americans. But the exemption is also important for online marketplaces such as eBay and Etsy.
Meanwhile Apple’s share price dropped 6.77 percent to $223.89, as its devices are mostly manufactured in tariff hit countries.
Indeed, Apple earns roughly half its revenue by selling the iPhone that is manufactured in China and India, while some of its other products (Apple Watch etc) are manufactured in Vietnam.
Another major concern for the tech sector is Trump’s 32 percent tariff on Taiwan, where most of the world’s computer chips are manufactured, prompting concerns of higher prices for laptops and PCs.
But in a rare piece of good news, Trump has given an exemption to semiconductor imports.
It is too early at the moment to say with any certainty as to the eventual impact of Trump’s tariffs on the overall tech sector, and indeed the global economy, but many economists are publicly warning that Trump’s tariffs will likely have a significant impact on global trade in the months and years ahead.
Higher prices and more inflation are two principle concerns of the consequences, and Goldman Sachs earlier this week raised the probability of a US recession in the next 12 months to 35 percent, up from 20 percent.
