Trump says steep copper tariffs in store as he broadens his trade war

WASHINGTON/TOKYO - US President Donald Trump broadened his global trade war on July 8 as he announced a 50 per cent tariff on imported copper and said long-threatened levies on semiconductors and pharmaceuticals were coming soon.

One day after he pressured 14 trading partners, including powerhouse US suppliers such as South Korea and Japan, with sharply higher tariffs, Mr Trump reiterated his threat of 10 per cent tariffs on products from Brazil, India and other members of

the Brics group of countries.

He also said trade talks have been going well with the European Union and China, but added that he is only days away from sending a tariff letter to the EU.

Mr Trump’s remarks, made during a White House Cabinet meeting, could inject further instability into a global economy that has been rattled by the tariffs he has imposed or threatened on imports to the world’s largest consumer market.

US copper futures jumped more than 10 per cent after Mr Trump’s announcement of new duties on a metal that is critical to electric vehicles, military hardware, the power grid and many consumer goods.

They would join duties already in place for steel, aluminium and automobile imports.

US pharmaceutical stocks also slid from the day’s highs after Mr Trump’s threat of 200 per cent tariffs on drug imports, which he said could be delayed by about a year.

Other countries, meanwhile, said they would try to soften the impact of his threatened duties after

he pushed back a July 9 deadline to Aug 1.

Mr Trump’s administration promised “90 deals in 90 days” after

the President unveiled an array of country-specific duties

in early April.

So far, only two agreements have been reached – with the United Kingdom and Vietnam. Mr Trump has said a deal with India is close.

He added that countries have been clamouring to negotiate.

“It’s about time the United States of America started collecting money from countries that were ripping us off... and laughing behind our back at how stupid we were,” he said. Mr Trump said late on July 8 that “a minimum of seven” tariff notices would be released on the morning of July 9, and more in the afternoon. He gave no other details in his Truth Social post.

Trading partners across the globe say it has been difficult to negotiate even framework agreements with the US, given the haphazard way new tariffs are announced, complicating their internal discussions about concessions.

Highest levels since 1934

Following Mr Trump’s announcement of higher tariffs for the 14 countries, US research group Yale Budget Lab estimated that consumers face an effective US tariff rate of 17.6 per cent, up from 15.8 per cent previously and the highest since 1934.

Goldman Sachs said the July 7 actions would add 1.4 percentage points to the US effective tariff rate.

Mr Trump’s administration has been touting those tariffs as a significant revenue source.

Treasury Secretary Scott Bessent said Washington has taken in about US$100 billion (S$128 billion) so far, and the figure could reach US$300 billion by the year end.

The US has taken in about US$80 billion annually in tariff revenue in recent years.

The S&P 500 finished slightly lower on July 8, a day after Wall Street markets sold off sharply following Mr Trump’s new tariff announcement.

Mr Trump said he will “probably” tell the EU within two days what rate it can expect for its exports to the US, adding that the 27-member bloc had been treating his administration “very nicely” in trade talks.

The EU – the US’ largest bilateral trade partner – aims to strike a deal before Aug 1 with concessions for certain key export industries, such as aircraft, medical equipment and spirits, according to EU sources.

Brussels is also considering an arrangement that would protect European automakers with large US production facilities.

However, German Finance Minister Lars Klingbeil warned that the EU was prepared to retaliate if necessary.

“If we don’t reach a fair trade deal with the US, the EU is ready to take countermeasures,” he said in the Lower House of Parliament.

Japan, which faces a possible 25 per cent tariff, wants concessions for its large automobile industry and will not sacrifice its agriculture sector – a powerful domestic lobby – for the sake of an early deal, said top trade negotiator Ryosei Akazawa on July 8.

South Korea, which also faces a possible 25 per cent tariff, said it planned to intensify trade talks over the coming weeks “to reach a mutually beneficial result”.

Washington and Beijing agreed to a trade framework in June, but with many of the details still unclear, traders and investors are watching to see if it unravels before a separate, US-imposed Aug 12 deadline or leads to a lasting detente.

“We have had a really good relationship with China lately, and we’re getting along with them very well. They’ve been very fair on our trade deal, honestly,” Mr Trump said, adding that he has been speaking regularly with Chinese President Xi Jinping.

Mr Trump said the US would impose tariffs of 25 per cent on goods from Tunisia, Malaysia and Kazakhstan; 30 per cent on South Africa and Bosnia and Herzegovina; 32 per cent on Indonesia; 35 per cent on Serbia and Bangladesh; 36 per cent on Cambodia and Thailand; and 40 per cent on Laos and Myanmar. REUTERS