Washington: South Korea on Wednesday became the latest exporter to finalize a trade deal with the United States to mitigate the impact of US tariffs set to take effect on August 1.
According to Bangladesh Sangbad Sangstha, the levies agreed upon by countries including Britain, the EU, Indonesia, Japan, the Philippines, and Vietnam are generally higher than the new base rate of 10 percent that the United States has applied to most countries since April. However, these tariffs are lower than the customs duties that the Trump administration threatened to impose on August 1 if no deal was reached.
While many details remain to be negotiated under these agreements, the countries involved have made considerable concessions to the US. In the case of South Korea, Trump announced that the US would impose a 15 percent tariff on imports, while Seoul committed to investing $350 billion in return. This agreement is in line with US trade deals with Japan and the European Union but is below the previously threatened 25 percent rate. Trump also mentioned an additional unspecified “large sum of money” to be invested by Seoul, details of which will be revealed when South Korean President Lee Jae Myung visits the White House within the next two weeks.
The European Union has also reached a deal with the United States, agreeing to a baseline US tariff of 15 percent across the board, which includes critical sectors such as automobiles, pharmaceuticals, and semiconductors. This rate is less than the 30 percent Trump had previously threatened but is still higher than existing duties. As part of this agreement, the EU has committed to purchasing $750 billion worth of energy from the US and making an additional $600 billion in investments. The deal also includes bilateral tariff exemptions on strategic products, such as aircraft and certain chemicals.
Japan, under its agreement with Washington, will see its exports taxed at 15 percent, a reduction from the threatened 25 percent rate. This includes tariffs on automobiles, a major component of Japanese exports to the US. However, tariffs of 50 percent on Japanese steel and aluminum will remain. In exchange, Japan has agreed to make $550 billion in investments in the US, with Washington retaining 90 percent of the profits from these investments.
The Philippines secured a one-percentage-point tariff reduction on its goods entering the US, resulting in a 19-percent levy on its exports. Meanwhile, the UK reached a deal with the US in May, where the tariff rate on cars reduced to 10 percent for the first 100,000 vehicles annually. Vietnam’s agreement with the US established a 20 percent tariff rate on its exports, while Indonesia’s deal resulted in a 19 percent tariff rate on its goods entering the US.
These trade agreements reflect a series of strategic negotiations aimed at balancing trade relations and mitigating potential economic impacts of heightened US tariffs under the Trump administration.