Trump's new tariff rates for dozens of countries send global markets tumbling

LAST UPDATE | 20 hrs ago

US PRESIDENT DONALD Trump ordered the reimposition of tariffs on dozens of trading partners today, causing markets around the world to tumble. 

However, in a minor reprieve that opens the door to further negotiations, the White House said these measures will take effect in a week, not today as previously expected.

With questions hanging over the effectiveness of bilateral trade deals already struck – including with the European Union and Japan – the outcome of Trump’s plan remains uncertain, but it has certainly spooked global markets once again.

Wall Street’s Dow Jones index dropped more than 1.2%, while Paris and Frankfurt tumbled nearly 3% lower.

The dollar gave up earlier gains against key currencies while oil prices plunged on fears that a weakening US economy would sap demand. 

On top of those developments, the number of jobs created in the US in July was much lower than expected. 

The US Labor Department said the US economy added just 73,000 jobs last month while revising down the figures for May and June.

“The US payrolls data has eclipsed news about the latest tariff rates applied to the world’s economies by Donald Trump, and is now dominating markets,” said Kathleen Brooks, research director at XTB trading group.

Earlier, she noted, tariffs had been “the main theme sucking risk sentiment from financial markets”.

The EU’s agreement with the Trump administration has been criticised by many, including some EU leaders.

Speaking today, Tánaiste Simon Harris said that had a trade deal not been struck between the EU and US, it would have been a “catastrophe” for Ireland.

It had also previously been thought that the tariffs would come into place for the EU today, but Harris said they will come into place from 7 August.

New measures

Trump’s new measures in an executive order raises duties on nearly 70 economies, from a current 10% level imposed in April when he unleashed “reciprocal” tariffs citing unfair trade practices.

The steeper levels, varying by trading partner, go as high as 41%.

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Trump also adjusted some tariff levels threatened in April, with Switzerland now facing a higher 39% duty and Thailand a lower 19% rate.

The tariff on Taiwanese products was revised down to 20%, but its President Lai Ching-te vowed to seek an even lower level.

Trump separately hiked tariffs on Canadian goods to 35%, though indicating in an NBC interview he was open to further talks.

Canada and Mexico face a separate tariff regime. But exemptions remain for imports entering the United States under a North American trade pact.

‘Sense of context’

Tánaiste Simon Harris today convened a meeting of the Government’s Trade Forum and said there needs to be a “sense of context” around the EU-US deal.

“Without a deal between the US and the EU, today would have seen 30% tariffs introduced by President Trump on the EU,” said Harris.

“There’s absolutely no doubt that that would have been a moment of catastrophe in terms of our economic well being as a country.”

He added that there are “many outstanding issues that need to be worked through” and that the “agreement in principle hasn’t yet been published”.

Harris also remarked that the EU deal might end up being better than the 10% deal struck between the US and UK, because the 10% baseline tariffs imposed on the UK are on top of existing tariffs.

The Tánaiste added that while the Government will need to see more details of how tariffs could impact the economy before finalising Budget 2026, the “initial expectation is that the economy will grow and  new jobs will be created, albeit both at a lower rate”.

He acknowledged that there are “a number of variables that aren’t known yet”, such as when tariffs on pharmaceuticals will come in or how many products will be exempted from tariffs.

Meanwhile, it’s understood that tariffs on the pharma sector will come into place when the ongoing Section 232 investigation is concluded, which is due to happen within two weeks.

“We have an assurance from the US that pharma will not get a tariff of any higher than 15%,” said Harris.

He added that the government will continue to work with the US and EU to “try and carve out as many exempted areas as possible, like med-tech and agri-food”.

He also said that within the pharma sector, “we need to see the opportunities for the US and EU to work together fully exploited”.

US economy

Trump has made tariffs core to his protectionist brand of hard-right politics.

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Yesterday, he claimed that the US economy had “no chance of survival or success” without tariffs.

But the latest salvo came amid legal challenges against Trump’s use of emergency economic powers.

After a lower court said the president exceeded his authority, the US Court of Appeals heard arguments yesterday in cases against Trump’s blanket tariffs targeting different countries.

While Trump has touted a surge in customs revenues this year, economists warn the duties could fuel inflation.

Proponents of his policy argue their impact will be one-off, but analysts are awaiting further data to gauge for more persistent effects.

Ones that got away

Those who managed to strike deals with Washington to avert steeper threatened levies were Vietnam, Japan, Indonesia, the Philippines, South Korea and the EU.

Britain also reached a pact with the United States, although it was not originally targeted by higher “reciprocal” tariffs.

For Canada, transshipped goods to evade its 35% duty would face even higher levels, said a White House fact sheet.

Its trade ties with Washington faced renewed threat after Prime Minister Mark Carney announced plans to recognise a Palestinian state at the UN General Assembly in September.

Trump’s latest order however appeared to raise tariffs on several countries not initially targeted in April – to 15% – including Ecuador, Ghana and Iceland.

Notably excluded from the drama was China, which faces a 12 August deadline instead, when duties could bounce back to higher levels.

Washington and Beijing at one point brought tit-for-tat tariffs to triple-digit levels, but both countries have agreed to temporarily lower these duties and are working to extend their truce.

-With additional reporting from Jane Matthews and Diarmuid Pepper