Today, U.S. Customs and Border Protection (CBP) formally implemented a unilateral 10% tariff on many imported goods. This decision represents a significant turn against decades of accepted global trade standards. The new tariffs took effect at 12:01 a.m. ET on Saturday, impacting goods from 57 larger trading partners, including Australia, Britain, Colombia, Argentina, Egypt, and Saudi Arabia. Former President Donald Trump’s unexpected announcement sent global stock markets tumbling. By Friday’s close, the market capitalization of all S&P 500 companies had fallen by a record-shattering $5 trillion.
Recently, CBP sent a missive to shippers. In doing so, they emphasized that there won’t be a grace period for cargoes already on the water despite the announcement made earlier of a 51-day grace period for goods loaded on vessels or planes before the tariff’s implementation. Moreover, the new tariffs hit imports across a wide range of categories. This list touches everything from crude oil and petroleum products to energy imports, pharmaceuticals, uranium, titanium, lumber, semiconductors and copper.
Kelly Ann Shaw, a trade lawyer at Hogan Lovells, said that this was a momentous bright spot. Prior to that, she was a trade adviser at the White House. She stated, “This is the single biggest trade action of our lifetime,” highlighting its potential to reshape international trade relations. She elaborated further by saying, “This is huge. This is a pretty seismic and significant shift in the way that we trade with every country on earth.”
Canada and Mexico are currently not subject to these new tariffs. They are still dealing with a 25% duty attached to the U.S. fentanyl crisis. Rules of origin The U.S.-Mexico-Canada Agreement’s strict rules of origin will remain in place for goods coming from these two next-door neighbors.
Investors are rightfully alarmed by the economic ramifications this back-from-the-grave tariff policy could wreak. The fallout from this anxiety has caused a historic two-day collapse in stock market value. The Trump administration is in fact already looking into additional national security tariffs in other sectors, including energy.
In an escalating trade war with China, even higher levies on items from other nations are set to start hitting next week. Vietnam has emerged as perhaps the biggest beneficiary of this shift. It will be slapped with a massive 46% tariff because it was instrumental in helping to shift U.S. supply chains out of China during Trump’s first-term trade war.
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