US trade war: The state of play as Trump signs order imposing new tariffs – but there are more delays
Donald Trump’s trade war has been difficult to keep up with, to put it mildly.
For all the threats and bluster of the US election campaign last year to the on-off implementation of trade tariffs – and more threats – since he returned to the White House in January, the president‘s protectionist agenda has been haphazard.
Trading partners, export-focused firms, customs agents and even his own trade team have had a lot on their plates as deadlines were imposed – and then retracted – and the tariff numbers tinkered.
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While the UK was the first country to secure a truce of sorts, described as a “deal”, the vast majority of nations have failed to secure any agreement.
Deal or no deal, no country is on better trading terms with the United States than it was when Trump 2.0 began.
Here, we examine what nations and blocs are on the hook for, and the potential consequences, as Mr Trump’s suspended “reciprocal” tariffs prepare to take effect. That will now not happen until 7 August.
Why was 1 August such an important date?
To understand the present day, we must first wind the clock back to early April.
Then, Mr Trump proudly showed off a board in the White House Rose Garden containing a list of countries and the tariffs they would immediately face in retaliation for the rates they impose on US-made goods. He called it “liberation day”.
The tariff numbers were big and financial markets took fright.
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What does the UK-US trade deal involve?
Just days later, the president announced a 90-day pause in those rates for all countries except China, to allow for negotiations.
The initial deadline of 9 July was then extended again to 1 August. Late on 31 July, Mr Trump signed the executive order but said that the tariff rates would not kick in for seven additional days to allow for the orders to be fully communicated.
Since April, only eight countries or trading blocs have agreed “deals” to limit the reciprocal tariffs and – in some cases – sectoral tariffs already in place.
Who has agreed a deal over the past 120 days?
The UK, Japan, Indonesia, the European Union and South Korea are among the eight to be facing lower rates than had been threatened back in April.
China has not really done a deal but it is no longer facing punitive tariffs above 100%.
Its decision to retaliate against US levies prompted a truce level to be agreed between the pair, pending further talks.
There’s a backlash against the EU over its deal, with many national leaders accusing the European Commission of giving in too easily. A broad 15% rate is to apply, down from the threatened 30%, while the bloc has also committed to US investment and to pay for US-produced natural gas.
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Millions of EU jobs were in firing line
Where does the UK stand?
We’ve already mentioned that the UK was the first to avert the worst of what was threatened.
While a 10% baseline tariff covers the vast majority of the goods we send to the US, aerospace products are exempt.
Our steel sector has not been subjected to Trump’s 50% tariffs and has been facing down a 25% rate. The government announced on Thursday that it would not apply under the terms of a quota system.
UK car exports were on a 25% rate until the end of June when the deal agreed in May took that down to 10% under a similar quota arrangement that exempts the first 100,000 cars from a levy.
Who has not done a deal?
Canada is among the big names facing a 35% baseline tariff rate. That is up from 25% and covers all goods not subject to a US-Mexico-Canada trade agreement that involves rules of origin.
America is its biggest export market and it has long been in Trump’s sights.
Mexico, another country deeply ingrained in the US supply chain, is facing a 30% rate but has been given an extra 90 days to secure a deal.
Brazil is facing a 50% rate. For India, it’s 25%.
What are the consequences?
This is where it all gets a bit woolly – for good reasons.
The trade war is unprecedented in scale, given the global nature of modern business.
It takes time for official statistics to catch up, especially when tariff rates chop and change so much.
Any duties on exports to the United States are a threat to company sales and economic growth alike – in both the US and the rest of the world. Many carmakers, for example, have refused to offer guidance on their outlooks for revenue and profits.
Apple warned on Thursday night that US tariffs would add $1.1bn of costs in the three months to September alone.
Barriers to business are never good but the International Monetary Fund earlier this week raised its forecast for global economic growth this year from 2.8% to 3%.
Some of that increase can be explained by the deals involving major economies, including Japan, the EU and UK.
US growth figures have been skewed by the rush to beat import tariffs but the most recent employment data has signalled a significant slowdown in hiring, with a tick upwards in the jobless rate.
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The big risk ahead?
It’s the prospect of another self-inflicted wound.
The elephant in the room is inflation. Countries imposing duties on their imports force the recipient of those goods to foot the additional bill. Do the buyers swallow it or pass it on?
The latest US data contained strong evidence that tariff charges were now making their way down the country’s supply chains, threatening to squeeze American consumers in the months ahead.
It’s why the US central bank has been refusing demands from Mr Trump to cut interest rates. You don’t slow the pace of price rises by making borrowing costs cheaper.
A prolonged period of higher inflation would not go down well with US businesses or voters. It’s why financial markets have followed a recent trend known as TACO, helping stock markets remain at record levels.
The belief is that Trump always chickens out. He may have to back down if inflation takes off.
We’ve seen this many times before.
Highly anticipated talks and meetings with America, Israel’s closest ally and the one country with the power to pressure Israeli Prime Minister Benjamin Netanyahu to change course, then nothing changes.
We need to give Steve Witkoff time to report his assessments back to the White House before we can give a complete verdict on this visit but what we’ve seen and heard so far has offered little hope.
The pressure on Donald Trump to stop the humanitarian catastrophe in Gaza is mounting after a small but vocal contingent of his base expressed outrage.
Even one of his biggest supporters in Congress, Marjorie Taylor Green, has referred to it as a genocide.
It was little coincidence Mr Witkoff was dispatched to the region for the first time in three months to speak to people on both sides and “learn the truth” to quote US ambassador to Israel, Mike Huckabee, who accompanied him to an aid site in Gaza.
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Gaza nurse: ‘We’re rationing care’
The pair spent five hours in Gaza speaking to people at a Gaza Humanitarian Foundation centre and it’s understood saw nothing of the large crowd of Palestinians gathering a mile away waiting for food.
Their sanitised tour of Gaza did not include a visit to a hospital where medics are receiving casualties by the dozen from deadly incidents at aid sites, and where they’re treating children for malnutrition and hunger.
A critical trauma nurse at Nasser hospital told us a 13-year-old boy was among the people shot while Mr Witkoff was in the enclave.
An American paediatrician at the same hospital who had publicly extended an invitation to meet with Mr Witkoff heard nothing from the US delegation.
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Dr Tom Adamkiewicz described people “being shot like rabbits” and “a new level of barbarity that I don’t think the world has seen”.
The US delegation was defensive of the controversial GHF aid distribution that was launched by America and Israel in May, hailing its delivery of a million meals a day.
But if their new system of feeding Gaza is truly working, why are we seeing images of starved children and hearing deaths every day of people in search of food?
The backdrop of this trip is very different to the last time Mr Witkoff was here.
In May, life was a struggle for Palestinians in Gaza, people were dying in Israeli bombings but, for the most part, people weren’t dying due to a lack of food or getting killed trying to reach aid.
Mr Netanyahu’s easing of humanitarian conditions a week ago, allowing foreign aid to drop from the sky, was an indirect admission of failure by the GHF.
Yet, for now, the US is standing by this highly criticised way of delivering aid.
A UN source tells me more aid is getting through than it was a week ago – around 30 lorries are due to enter today compared to around five that were getting in each day before.
Still nowhere near enough and it’s a complex process of clearances and coordination with the IDF through areas of conflict.
Lorries are regularly refused entry without explanation.
Then there was Mr Witkoff’s meeting with hostage families a day later where we began to get a sense of America’s new plan for Gaza.
The US issued no public statement but family members shared conversations they’d had with Mr Trump’s envoy: bring all the hostages home in one deal, disarm Hamas and end the war. Easier to propose than to put into practice.
Within hours of those comments being reported in the Israeli media, Hamas released a video of hostage Evyatar David looking emaciated in an underground tunnel in Gaza.
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Video released of Israeli hostage
Now 24 years old, he was kidnapped from the Nova festival on 7 October and is one of 20 hostages understood to be still alive. The release of the video was timed for maximum impact.
Hamas also poured water on any hopes of a deal in a statement, refusing to disarm unless an independent Palestinian state is established.
Hamas has perhaps become more emboldened in this demand after key Israeli allies, including the UK, announced plans for formal recognition in the last week.
It’s hard to see a way forward. The current Israeli government has, in effect, abandoned the idea of a two-state solution.
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The Trump administration’s recent boycott of international conferences on the matter suggests America is taking a similar line, breaking with its long-standing position.
Arab nations could now be key in what happens next.
In an unprecedented move, Saudi Arabia, Qatar and Egypt joined a resolution calling for Hamas to disarm and surrender control of Gaza following a UN conference earlier this week.
This is hugely significant – highly influential powers in its own backyard have not applied this sort of pressure before.
For all the US delegation’s good intentions, it’s still political deadlock. Israeli hostages and Palestinians in Gaza left to starve and suffer the consequences.
Tens of thousands of Sydney residents marched across the city’s iconic Harbour Bridge to support Palestinians in Gaza and call for an end to the war.
The decision to centre the protest on such an iconic landmark was controversial. The bridge is considered a symbol of unity in the city.
However, the Israel-Hamas war has been deeply divisive in Australia and increased tension between the country’s Jewish and Muslim communities.
Protesters walk across the Sydney Harbour Bridge. Pic: AAP/Dean Lewins/Reuters
On Sunday there were pro-Palestinian demonstrations in Melbourne, Adelaide and Sydney.
In Sydney organisers hoped 50,000 people would attend, despite heavy rain.
In the end, the bridge and the central business district were so packed – and the weather so bad – that police and organisers called the march off mid-way, fearing there would be a crush in the crowd.
Protest in Sydney. Pic: @emafranklin via Storyful
Police said the crowd numbers in the Sydney Harbour Bridge march were “far greater” than expected, creating the risk of a crowd crush.
“It was perilous,” said senior officer Peter McKenna, adding his force was “very lucky the crowd was well-behaved”.
The final figures for the number of people who attended haven’t been released. But it was an impressive turnout in the tens of thousands.
Some of those attending the march, called by its organisers the March for Humanity, carried pots and pans as symbols of the hunger in the besieged enclave of Gaza.
Julian Assange joined protesters. Pic: AAP/Dean Lewins/Reuters
There was also a surprise guest, Wikileaks founder Julian Assange.
He has largely kept a low profile since his release from a British prison last year. He didn’t speak to the crowd, but he was among those leading the march.
However, the demonstration almost didn’t happen after New South Wales police tried to stop it from taking place on the Harbour Bridge.
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On Saturday, the country’s Supreme Court ruled it could go ahead.
Despite the rain, there were families with children and seniors as well. It was a true cross-section of Australian society.
One of the protesters, Sarah, drove up from the Blue Mountains outside Sydney to attend.
She said, “enough is enough” and the Australian government should take “stronger action”.
Pro-Palestine protesters on Sydney Harbour Bridge
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Sarah also said Australians want people to know they care about what’s happening in the world.
Australia has not joined France, the UK and Canada is announcing plans to recognise a Palestinian state in September.
The government here says recognition is a matter of “when not if”. But it has not committed to any timeline.
Public pressure is growing on Prime Minister Anthony Albanese to take a stronger stand against the war. So far, he has largely resisted that pressure.
But the government’s language towards Israel is becoming more critical.
Just 36 aid trucks entered Gaza on Saturday – despite the humanitarian situation in the enclave worsening, Palestinian officials have warned.
According to the Gazan government’s media office, most of the humanitarian supplies were looted and stolen – “as a result of the state of security chaos that the Israeli occupation systematically and deliberately perpetuates”.
Officials say at least 600 truckloads of aid are required on a daily basis, adding: “The needs of the population are worsening.”
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Gaza nurse: ‘We’re rationing care’
A statement released late last night called for “the immediate opening of crossings, and the entry of aid and infant formula in sufficient quantities” – and “condemned in the strongest terms the continuation of the crime of starvation”.
Israel’s prime minister, Benjamin Netanyahu, refuted this – and accused Hamas of “stirring up a slanderous propaganda campaign against Israel”.
He said: “The cruelty of Hamas has no boundaries. While the State of Israel is allowing the entry of humanitarian aid to the residents of Gaza, the terrorists of Hamas are deliberately starving our hostages and document them in a cynical and evil manner.
“The terrorists of Hamas are deliberately starving the residents of the Strip as well, preventing them from receiving the aid.”
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Aid drops continue over Gaza
It comes as the Palestinian Red Crescent in Gaza said its headquarters in Khan Younis were hit by an Israeli strike, killing one staff member and injuring three others.
Footage posted on social media shows a fire broke out in the building.
Indirect negotiations between Hamas and Israel for a 60-day ceasefire, and a deal for the release of half the hostages still held in Gaza, ended in deadlock last week.
US President Donald Trump’s Middle East envoy told the families of the hostages yesterday that he was working with the Israeli government on a plan that would end the war.
Steve Witkoff arrives to meet families of hostages in Tel Aviv. Pic: AP
Steve Witkoff claimed that Hamas was willing to disarm to stop the conflict, despite the group’s repeated statements that it would not do so.
In response, Hamas said it would not disarm unless an independent Palestinian state is established with Jerusalem as its capital.
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After Mr Witkoff’s meeting with the families of the hostages, Hamas released two videos of an emaciated Israeli hostage, Evyatar David, who was abducted from the Nova music festival on 7 October 2023 and has been held in captivity in Gaza since.
The 24-year-old looked skeletal, with his shoulder blades protruding from his back. He was heard saying that he had not eaten for three days. The distressing videos show him digging his own grave, he said in the footage.
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