Trump Threatens New Tariffs, Trade deficits Remain a Concern
Former President Trump is signaling a potential return to aggressive trade tactics, raising the possibility of new tariffs on goods from key economic partners like Japan and South Korea. Despite promises of rapid trade deal successes during his previous governance, concrete results have been limited, and existing agreements appear to be under renewed scrutiny.
Trump’s recent proposals include doubling tariffs on Vietnamese imports suspected of being transshipment points for Chinese goods, effectively increasing the duty to 40%. A framework agreement with the United Kingdom would offer some relief from existing tariffs on steel, aluminum, and automobiles, but would still impose a general 10% tariff on British goods.
The move comes as the United States continues to grapple with significant trade imbalances. In 2024, the US recorded a US$69.4 billion trade deficit with Japan and a US$66 billion deficit with South Korea – meaning the US imported considerably more from these nations than it exported.
Details outlined in Trump’s communications suggest automobiles would face a standard 25% tariff globally, while steel and aluminum imports could be subject to a 50% tax. This approach echoes concerns from his first term, where celebrated trade agreements with both South Korea and Japan ultimately failed to deliver on initial expectations. A 2018 agreement with South Korea and a 2019 deal with Japan, focused on agriculture and digital trade, were initially hailed as victories but now appear insufficient.
Adding another layer of complexity, Trump has indicated that countries aligning with the BRICS economic bloc – comprising Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates – could face an additional 10% tariff.
The potential for these new tariffs raises questions about the future of international trade relations and the effectiveness of past trade negotiations. The situation remains fluid as Trump continues to outline his trade policy vision.
