|
||
|
TWN
Info Service on WTO and Trade Issues (Aug25/02) Geneva, 1 Aug (D. Ravi Kanth) — The deadline on the allegedly unilateral and illegal reciprocal tariff regime announced by United States President Donald Trump expired in the early hours of 1 August, but there is no clarity yet on how many countries have made trade deals with Washington, in what appears to be a new phase of non-MFN (most-favoured-nation) trade between countries, said people familiar with the development. In this so-called new trade order of “might is right”, the world’s largest economy, namely, the United States, has seemingly secured reverse special and differential treatment from all members of the World Trade Organization by imposing reciprocal tariffs to make up for its allegedly failed economic and trade policies during the past 40 years, said people familiar with the development. On 31 July, the White House spokesperson Ms Karoline Leavitt informed that “of our 18 major trading partners, two-thirds of those trading partners have a deal.” She said the US “sent out 17 letters to countries around the world, and the rest of those countries that either do not have a deal or have a letter, they will be hearing from this administration by the midnight deadline tonight.” India and Malaysia are among the countries that have not yet concluded an agreement with the US, while Canada, another large trading partner of the US, seems to have not reached any agreement with the US either. President Trump said on his Truth Social media website on 31 July that Canada’s decision to recognize a Palestinian state, “will make it very hard for us to make a trade deal with them.” It remains to be seen if the two countries will strike any agreement before the end of the deadline. But with a tariff of 35% staring Canada in the face, it appears that discussions between the two countries are reportedly being continued, said people familiar with the development. Meanwhile, China has until 12 August to extend the pause on high tariffs. Even for the major trading partners that have made deals and for the 150-plus other countries that are just waiting for some semblance of a sign about whether they’re going to get the universal tariff of 10%, which President Trump initially announced and was never paused, or some other number, how this actually gets implemented is unclear, said a CNN commentator. “The rush of last-minute efforts to clinch deals with the president from delegations from other countries has actually made it a little bit of a more complicated process, giving Trump a lot of leverage, but nobody’s really sure how this is gonna land by midnight,” the commentator said. MEXICO AND INDIA President Trump’s seemingly disparaging remarks on 31 July against India that it is a “dead economy”, with the US having “done very little business” with the country, while granting a 90-day reprieve for Mexico to settle for an agreement to avoid the reciprocal tariffs, appear to have exposed the underlying arbitrariness of Washington’s reciprocal tariff regime, said people familiar with the development. A day before the “Liberation Day” reciprocal tariffs announced on 2 April were made final on 1 August, President Trump’s remarks against India on his Truth Social media website led to a huge uproar in the Indian parliament, with severe condemnation by several political parties, said people familiar with the development. In statements on social media and then while speaking to the White House press corps on late evening on 30 July, President Trump inveighed against India for its ties with Russia, its membership in the “Anti-American” BRICS, the high tariffs against the US, the “massive” trade deficit between India and the US, and for imposing the “most strenuous and obnoxious non-monetary Trade Barriers of any Country”. President Trump said that India and Russia “can take their dead economies down together”, amidst a barrage of criticisms against India, and announcing a tariff of 25% on all Indian goods entering the American market. The US has already imposed a 50% tariff on Indian steel and aluminium products entering the US, a 25% tariff on automobiles and auto parts exported to the US, and now a 50% tariff on imports of copper products. Besides, the US has reportedly announced that it would soon impose Section 232 tariffs on pharmaceuticals, of which India is one of the main exporters, as well as on computer chips. “All things not good”, President Trump wrote on Truth Social on 30 July, adding that India would be paying a tariff of 25% from 1 August, plus a “penalty” for buying military hardware and energy from Russia. However, on 31 July morning, he posted that India and Russia “can take their dead economies down together, for all I care”, adding that the US and India “don’t do a lot of trade”. Last year, two-way trade between India and the US in goods and services was around $186 billion, with a surplus of $41 billion in India’s favour. But what appears to have “anguished” the Indian ruling establishment is the specific comment that India is a “dead economy”, even though it is growing at around 6% and is reckoned to be the world’s fifth largest economy, said people familiar with President Trump’s remarks on 31 July. In countering President Trump’s remarks, the Indian Commerce and Industry Minister Piyush Goyal said that India is being seen as an economic “bright spot” in the world. “We will take all necessary steps to secure and advance our national interests,” the commerce minister is understood to have said. Last week, Mr Goyal had claimed that India and the US were poised to reach an interim agreement, with a final agreement to be concluded in the fall (October-November), which aims to accomplish a two-way trade turnover of $500 billion in five years. The apparent commotion in the Indian parliament over President Trump’s remarks on 31 July has seemingly placed the government on a backfoot because India was the first country to enter into bilateral discussions with the US even before the announcement of the reciprocal tariffs, said people familiar with the development. However, the Indian commerce minister said, “the government is confident that we will continue our fast-paced journey of inclusive growth and sustainable development towards the goal of Viksit Bharat 2047.” “India is moving confidently towards self-reliance,” Mr Goyal added, referring to India as one of the “top five economies of the world”, and which is poised to become the third largest. The tone and tenor of the Indian commerce minister’s statement seemed somewhat different from “the earlier hype” it had created about the bilateral trade agreement with the US, said a former Indian trade envoy to the WTO, who asked not to be quoted. Mr Goyal went on to defend the bilateral trade agreements that India had signed with several countries, while highlighting that in an increasingly protectionist world, India had entered into a number of “mutually beneficial” trade agreements with the UAE, the UK, Australia and the European Free Trade Association (EFTA) countries. “We are also committed to entering into similar trade agreements with other countries,” he said. “We are continuously working for the welfare of farmers and Indian agriculture so that food security and sustainable prosperity can be ensured.” Obviously, President Trump’s criticism against India, in particular the reference to “farmers and workers”, indicates issues of market access on agricultural products, genetically modified products and dairy items, as well as labour protection laws being among the sticking points between them, according to The Hindu newspaper on 31 July. President Trump’s remarks on working together with Pakistan for “developing their massive Oil Reserves” as well as that Pakistan may be “selling oil to India someday!” – appear to have placed India in an embarrassing spot, said the former Indian trade envoy to the WTO. President Trump also indicated that the final call on the 25% tariff is yet to be made, as the two sides are currently talking at this juncture. While several close trading partners were being treated somewhat harshly, President Trump appears to have accorded a less hostile treatment to Mexico by extending the deadline on higher tariffs by 90 days. Writing in his Truth Social media website on 31 July, President Trump said, “I have just concluded a telephone conversation with the President of Mexico, Claudia Sheinbaum, which was very successful in that, more and more, we are getting to know and understand each other.” He added that “the complexities of a Deal with Mexico are somewhat different than other Nations because of both the problems, and assets, of the Border.” President Trump went on to say, “We have agreed to extend, for a 90 Day period, the exact same Deal as we had for the last short period of time, namely, that Mexico will continue to pay a 25% Fentanyl Tariff, 25% Tariff on Cars, and 50% Tariff on Steel, Aluminum, and Copper.” “Additionally, Mexico has agreed to immediately terminate its Non Tariff Trade Barriers, of which there were many,” he said, emphasizing that “we will be talking to Mexico over the next 90 Days with the goal of signing a Trade Deal somewhere within the 90 Day period of time, or longer.” He further said that “present at the meeting were Vice President JD Vance, Secretary of Treasury Scott Bessent, Secretary of State Marco Rubio, Secretary of Commerce Howard Lutnick, United States Trade Representative and Ambassador Jamieson Greer, Chief of Staff Susie Wiles, and Deputy Chief of Staff for Policy, and United States Homeland Security Advisor, Stephen Miller.” With the 1 August deadline coming to an end for dozens of countries to offer their best trade deal to the US or face stiff tariff rates, there appears to be growing turmoil in the global trading system. INTERVIEW In an interview on 31 July with Professor Petros C. Mavroidis of Columbia Law School, an expert on trade law, the SUNS asked for clarity on the unilateral tariffs imposed by the Trump administration on various countries and how they could be characterized, including the 25% tariff on Indian goods. In response, Prof Mavroidis said, “to be fair, because the whole idea of the World Trading System was to provide some certainty with regard to the costs of transactions across trading partners, now, all this has been upended since January 20.” He said, “what happened to India is very similar to what happened to a few other WTO members,” adding that “President Trump announced unilaterally a set of tariffs on April 2, which he suspended, threatening that he would go back to the original announcement if there was no deal [by 1 August].” “Now, I don’t know how many deals he negotiated in good faith or he didn’t negotiate at all,” said Prof Mavroidis, arguing that “what we do know is that there are some deals. I wouldn’t call them agreements. There’s nothing written. It’s nothing like set in stone here.” He continued: “Even the US administration calls it framework agreements with some and unilateral tariffs with others. How did he make this decision? It’s difficult to say.” To further elaborate on his assessment, he cited two examples: “One hypothesis was he was negotiating tariffs with WTO members with who the US had a trade deficit. This is not the case of Brazil. So, Brazil was hit by tariffs, even though the US has no trading deficit.” “The second point,” he said, “is also quite remarkable, is [that] all these tariffs and all the agreements or whatever agreements, the deals, to be more precise, they are non-MFN (most-favored-nation treatment where a country offers the same level of market access as it does to its most favored trading partners),” and that they are merely “bilateral deals.” “So, the US will give one sauce to the goose and another to the gander,” he said. “This goes against the heart and the spirit and the letter of the WTO,” he argued. According to Prof Mavroidis, the trading nations “are in a situation where the US decided to go unilateral and forget about the shackles imposed by the world trading regime.” To a question as to where would countries go from this quagmire created by President Trump, the trade academic said, “quite frankly, your question is extremely interesting and has two legs. The first leg, where do we go from here? I think nobody can tell you. Nobody. I mean, I was stunned when I heard Ursula von der Leyen, a couple of days ago, claimed that we managed to bring certainty. That is the EC President, EC Commission President, correct? Yes, the Commission President. Yes, when she said we managed to bring certainty in our relations with the US. Where does this certainty come from? Now, we didn’t sign an agreement. It’s all a verbal promise. I will impose 15 percent, and we don’t know anything about 80 percent of this agreement.” Elaborating on the US-EU agreement, he said that “there are so many things we don’t know,” adding, “So, what will happen in the future, I cannot tell you.” According to Prof Mavroidis, countries have failed to make a “grand alliance” to hit back against the reciprocal tariffs on the day when they were announced on 2 April. “Now, you would expect if on April 2 all the world had come together and said, stop here, we don’t accept this bullying, we have a world trade agreement, a World Trade Organization, we have agreements for 30 years, we stand on one front and we won’t allow this, he [President Trump] might have thought twice before doing what he did. But this is not what happened then.” He lamented that “this common front never emerged. Never.” He said that he would partly blame India, “because I consider India along with the European Union, China and Brazil, the four players who should have led the coalition against unilateralism.” “What I found disturbing is that none of our leaders, at least of these four, thought about forming a grand coalition, none of them, and didn’t see one move towards a common response,” he added. China retaliated against the US reciprocal tariffs and took the case to the WTO. When asked whether other countries should have followed China’s example, Prof Mavroidis cited one of his economist friends in the US as saying that “the hope for the survival of the world trading system now rests on China.” NEW TARIFF LIST Following is the list of countries given new reciprocal tariff rates. Some of the rates reflect trade deals made with the United States, while in other cases a deal has not been completed. The rate listed below for Brazil is in addition to the 40% tariff imposed separately by President Trump for what he said are national security concerns. Countries not on the list below will receive the 10% global reciprocal tariff rate. The tariff rates announced by the White House on 1 August are: Afghanistan, 15%; Algeria, 30%; Angola, 15%; Bangladesh, 20%; Bolivia, 15%; Bosnia and Herzegovina, 30%; Botswana, 15%; Brazil, 10%; Brunei, 25%; Cambodia, 19%; Cameroon, 15%; Chad, 15%; Costa Rica, 15%; Cote d`Ivoire, 15%; Democratic Republic of Congo, 15%; Ecuador, 15%; Equatorial Guinea, 15%; European Union: Goods with Column 1 Duty Rate more than 15% – 0% and Goods with Column 1 Duty Rate less than 15% – 15% minus Column 1 Duty Rate; Falkland Islands,10%; Fiji, 15%; Ghana, 15%; Guyana, 15%; Iceland, 15%; India, 25%; Indonesia, 19%; Iraq, 35%; Israel, 15%; Japan, 15%; Jordan, 15%; Kazakhstan, 25%; Laos, 40%; Lesotho, 15%; Libya, 30%; Liechtenstein, 15%; Madagascar, 15%; Malawi, 15%; Malaysia, 19%; Mauritius, 15%; Moldova, 25%; Mozambique, 15%; Myanmar (Burma), 40%; Namibia, 15%; Nauru, 15%; New Zealand, 15%; Nicaragua, 18%; Nigeria, 15%; North Macedonia, 15%; Norway, 15%; Pakistan, 19%; Papua New Guinea, 15%; Philippines, 19%; Serbia, 35%; South Africa, 30%; South Korea, 15%; Sri Lanka, 20%; Switzerland, 39%; Syria, 41%; Taiwan, 20%; Thailand, 19%; Trinidad and Tobago, 15%; Tunisia, 25%; Turkey, 15%; Uganda, 15%; United Kingdom, 10%; Vanuatu, 15%; Venezuela, 15%; Vietnam, 20%; Zambia, 15%; and Zimbabwe, 15%. +
|
||
