Trump’s first trade deals: A look at the key agreements
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While many details regarding the trade deals with the US remain to be negotiated, the countries concerned made considerable concessions to Washington.
PHOTO: REUTERS
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WASHINGTON – Taiwan and Malaysia on July 31 became the latest exporters to strike a deal with the United States, in a bid to limit the impact of US tariffs set to take effect on Aug 1.
On July 30, Pakistan had concluded an agreement with Washington. However, the specific levies agreed upon for both Pakistan, Malaysia and Taiwan are yet to be disclosed.
The levies agreed by Britain, the European Union, Indonesia, Japan, the Philippines, Vietnam and South Korea are generally higher than the new base rate of 10 per cent that the US has applied to most countries since April.
But they are lower than the levels of Customs duty the administration of US President Donald Trump threatened to impose on Aug 1 if no deal was reached.
While many details remain to be negotiated under the deals, the countries concerned made considerable concessions to the US.
Taiwan
Taiwan Cabinet spokeswoman Michelle Lee said on July 31 that Taipei had reached “a certain consensus” with the US on tariffs, though no details were given.
Taiwan faces a 32 per cent tax and potential duties on semiconductors, a key export.
Ms Lee said the talks covered tariffs, non-tariff barriers, trade facilitation, supply chain resilience and economic security.
“We are still waiting for the US government’s decision-making process to conclude,” she said, adding that both sides had also negotiated a joint statement and would update the public when ready.
Malaysia
Official sources told The Straits Times that a deal to lower US tariffs to between 15 per cent and 20 per cent
Kuala Lumpur made concessions on issues such as halal certification and the supply of rare earths.
“The call was made earlier this morning after it was proposed by the Americans just a few hours back,” said a senior Malaysian official.
Datuk Seri Anwar confirmed the 6.50am call in Parliament on July 31, adding: “After the discussion and some clarifications that I made, he decided to postpone the announcement of the tariff rate to tomorrow.”
Pakistan
The US will help develop Pakistan’s oil reserves.
“We have just concluded a deal with the country of Pakistan, whereby Pakistan and the United States will work together on developing their massive oil reserves,” Mr Trump wrote on social media on July 30.
Mr Trump did not provide further details. He also did not mention any agreement on tariffs.
Pakistani Foreign Minister Ishaq Dar also confirmed the deal’s conclusion on social media, without elaborating further.
Pakistan’s Finance Ministry said on July 31 the trade deal “will result in reduction of reciprocal tariffs especially on Pakistani exports to the United States”, but did not give details of what the tariffs would be.
South Korea: 15 per cent
Mr Trump said on July 30 that the US will impose a 15 per cent tariff on imports from South Korea,
The deal struck is below a 25 per cent rate that he had threatened earlier, and on a par with US trade deals with Japan and the EU.
Mr Trump added that an additional, unspecified “large sum of money” will be invested by Seoul, to be announced when South Korean President Lee Jae Myung visits the White House for a meeting within the next two weeks.
EU: 15 per cent
Mr Trump and European Commission President Ursula von der Leyen clinched a deal on July 27 that includes a baseline US tariff of 15 per cent in a bid to avert a full-blown trade war.
Mr Trump said the 15 per cent levy would apply across the board, including to Europe’s crucial auto sector, pharmaceuticals and semiconductors.
That is lower than the blanket 30 per cent tariffs he had threatened to impose, but significantly higher than the duties in place to date.
As part of the deal, the 27-nation EU has agreed to purchase energy worth US$750 billion from the US and make US$600 billion in additional investments, according to Mr Trump.
He said EU countries – which recently pledged to ramp up their defence spending within Nato – would be purchasing “hundreds of billions of dollars’ worth of military equipment”.
The two sides have agreed to bilateral tariff exemptions on a number of “strategic products”, notably aircraft, certain chemicals, some agricultural products and critical raw materials.
France’s Minister for European Affairs, Mr Benjamin Haddad, said on July 28 the agreement was “unbalanced”, and Germany’s BDI business federation said the accord would have “considerable negative repercussions”.
Japan: 15 per cent
Under the terms of the trade deal that Japan agreed to with Washington, the country’s exports will be taxed at 15 per cent instead of the threatened 25 per cent rate.
Crucially, that reduction includes the tariff on automobiles, an industry accounting for 30 per cent of Japanese exports to the US in 2024.
Tariffs of 50 per cent on Japanese steel and aluminium will continue to apply.
The White House said that under the deal, Japan would make US$550 billion in investments in the US.
Washington said it would retain 90 per cent of the profits from these investments and Japan would buy US$8 billion worth of US goods, including agricultural produce, aviation fuel and 100 Boeing planes.
Philippines: 19 per cent
Under an accord announced by the White House, the Philippines obtained a tariff reduction of 1 percentage point
Products from the South-east Asian country, a major exporter of high-tech items and apparel, will face a 19 per cent levy.
Britain: 10 per cent on average
London and Washington concluded a deal in May, under which a 27.5 per cent tariff rate on cars dropped to 10 per cent for the first 100,000 vehicles per year, a major win for Jaguar Land Rover.
The deal also benefits the British aerospace sector, in particular jet engine manufacturer Rolls-Royce, which won a tariff exemption.
London is still negotiating exemptions for its steel and aluminium products from the 25 per cent rate in force.
In return, Britain had to open its market further to US ethanol and beef, which has caused concern domestically.
The rest of Britain’s products are subject to the 10 per cent base rate.
Vietnam: 20 per cent
Vietnam reached a deal in early July with the US, its main export market for products including clothing and shoes.
The deal will see its shipments subject to a 20 per cent tariff,
But a 40 per cent tariff will be imposed on goods manufactured in third countries that use Vietnam to circumvent steeper trade barriers.
US goods will not face any tariffs entering Vietnam.
Indonesia: 19 per cent
Under a deal reached in mid-July, Indonesian exports to the US will be taxed at 19 per cent,
According to Washington, nearly all US goods will be able to enter Indonesia tariff-free.
Moreover, it said Jakarta had agreed to recognise US standards for car and pharmaceutical imports.
Indonesia had already made other concessions earlier in July, pledging to buy more US oil and agro-industrial goods. AFP
