Flags of trade partner countries surround Trump as he signs agreements lowering tariffs and securing investments.
As new U.S. tariffs on August 1 take effect, key trading partners such as South Korea, the UK, the EU, and others have scrambled to secure last-minute trade agreements with the United States in order to cushion the impact.
While these deals typically feature higher-than-normal levies, they nonetheless fall short of the harsher tariffs originally threatened by ex-U.S. President Donald Trump. In most instances, countries have made deep economic or policy concessions in exchange.
South Korea is the latest nation to get a trade agreement with the U.S., agreeing on Wednesday. Trump confirmed that South Korean imports would now be subject to a 15 percent tariff, less than the earlier threatened 25 percent.
Trump also stated, "Seoul will also invest $350 billion in return," with further investments to be announced when the South Korean President Lee Jae Myung comes to the White House in the weeks ahead.
The conditions are akin to the arrangements the U.S. has made with Japan and the European Union.
Trump and European Commission President Ursula von der Leyen agreed on Sunday, reaching a 15 percent base tariff in major sectors such as automobiles, pharmaceuticals, and semiconductors. Although the rate is higher than previous duties, it is significantly lower than the previously proposed 30 percent across-the-board tariff.
Trump asserted that the EU would "buy energy worth $750 billion from the United States and invest $600 billion extra." Also, he observed that European nations would buy 'hundreds of billions of dollars' worth of military equipment.
Mutual tariff exemptions on some strategic products, like aircraft, certain chemicals, farm products, and key raw materials, are part of the deal. Not everyone in the EU is happy, though. France's Europe minister, Benjamin Haddad, denounced the deal as 'unbalanced', and Germany's BDI business association warned that it could have 'significant negative consequences'.
Japan's trade agreement with Washington also yielded a 15 percent tariff, from a threatened 25 percent. This includes auto tariffs, which account for around 30 percent of Japanese exports to the U.S.
But tariffs of up to 50 percent on Japanese aluminum and steel don't change. The White House said Japan agreed to $550 billion in investments in the U.S. Washington will see 90 percent of the earnings on these investments, and Japan will buy $8 billion in American products, agricultural produce, aviation fuel, and 100 Boeing planes.
The Philippines got a small reduction in tariffs on its exports to the U.S., lowering the rate to 19 percent. The Southeast Asian country, which sends a large amount of computer-related products and clothing to other countries, initially had a 20 percent tariff.
The tariff has fallen by a little bit, yet is still comparatively high under the new deal.
The U.S. and UK agreed in May to cut auto tariffs from 27.5 percent to 10 percent on the first 100,000 vehicles a year, helping British car makers like Jaguar Land Rover. British aerospace firms, including Rolls-Royce, were also exempted.
London remains in talks to suspend the 25 percent tariffs on its steel and aluminum exports. As a quid pro quo for these advantages, Britain promised greater market access for U.S. ethanol and beef, a step that has stirred domestic opposition. Other British exports will still be subject to the 10 percent base tariff.
Vietnam, one of the largest exporters of clothing and shoes to the U.S., reached an agreement in early July to lower its rate of export tariff to 20 percent, rather than pay a much higher 46 percent rate.
The deal, however, has a provision of charging a 40 percent duty on products made in third nations that try to divert through Vietnam in order to avoid payment of higher tariffs. American exports to Vietnam will not incur any tariffs.
Indonesia agreed in mid-July to reduce its export tariffs to 19 percent from a previously threatened 32 percent in exchange for the country opening the door for most U.S. products tariff-free.
Jakarta also committed to accepting American standards for cars and drugs. Indonesia committed earlier in July to raising its imports of U.S. oil and farm products.
Although these agreements could have avoided more retaliatory tariff increases, most of them contain broad concessions that benefit U.S. interests, demonstrating the president's aggressive trade policy in action.
