tariff

WASHINGTON — President Trump has asked the Supreme Court for a fast-tracking ruling that he has broad power acting on his own to impose tariffs on products coming from countries around the world.

Despite losing in the lower courts, Trump and his lawyers have reason to believe they can win in the Supreme Court. The six conservative justices believe in strong presidential power, particularly in the area of foreign policy and national security.

In a three-page appeal filed Wednesday evening, they proposed the court decide by Wednesday to grant review and to hear arguments in early November.

They said the lower court setbacks, unless quickly reversed, “gravely undermine the President’s ability to conduct real-world diplomacy and his ability to protect the national security and economy of the United States.”

They cited Treasury Secretary Scott Bessent’s warning about the potential for economic disruption if the court does not act soon.

“Delaying a ruling until June 26 could result in a scenario in which $750 billion-$1 trillion have already been collected and unwinding them could cause significant disruption.” he wrote.

Trump and his tariffs ran into three strong arguments in the lower courts.

First, the Constitution says Congress, not the president, has the power “to lay and collect Taxes, Duties, Imposts and Excises” and a tariff is an import tax.

Second, the 1977 emergency powers law that Trump relies on does not mention tariffs, taxes or duties, and no previous president has used it to impose tariffs.

And third, the Supreme Court has frowned on recent presidents who relied on old laws to justify bold new costly regulations.

So far, however, the so-called “major questions” doctrine has been used to restrict Democratic presidents, not Republicans.

Three years ago, the court’s conservative majority struck down a major climate change regulation proposed by Presidents Obama and Biden that could have transformed the electric power industry on the grounds it was not clearly based on the Clean Air Acts of the 1970s.

Two years ago, the court by the same 6-3 vote struck down Biden’s plan to forgive hundreds of millions of dollars in student loans. Congress had said the Education Department may “waive or modify” monthly loan payments during a national emergency like the Covid 19 pandemic, but it did not say the loans may be forgiven, the court said. Its opinion noted the “staggering” cost could be more than $500 billion.

The impact of Trump’s tariffs figure to be at least five times greater, a federal appeals court said last week in ruling them illegal.

By a 7-4 vote, the federal circuit court cited all three arguments in ruling Trump had exceeded his legal authority.

“We conclude Congress, in enacting the International Emergency Economic Powers Act, did not give the president wide-ranging authority to impose tariffs,” they said.

But the outcome was not a total loss for Trump. The appellate judges put their decision on hold until the Supreme Court rules. That means Trump’s tariffs are likely to remain in effect for many months.

Trump’s lawyers were heartened by the dissent written by Judge Richard Taranto and joined by other others.

He argued that presidents are understood to have extra power when confronted with foreign threats to the nation’s security.

He called the 1977 law “an eyes-open congressional grant of broad emergency authority in this foreign-affairs realm” that said the president may “regulate” the “importation” of dangerous products including drugs coming into this country.

Citing other laws from that era, he said Congress understood that tariffs and duties are a “common tool of import regulation.”

Analysts say the cuts in the Goods and Services Tax is aimed at boosting demand in the wake of 50 percent tariffs on Indian goods.

India has announced tax cuts on hundreds of consumer items ranging from soaps to small cars to spur domestic demand in the face of economic headwinds from punishing tariffs imposed by US President Donald Trump.

The measures come as the 50 percent US tariffs took effect last month, raising fears of an economic slowdown.

The Goods and Services Tax (GST) has been overhauled to simplify India’s complex four-tier system into two slabs and cut levies across sectors, in some cases by more than half, announced Finance Minister Nirmala Sitharaman.

Sitharaman said a panel, which looked into the GST reforms, approved cuts in consumer items such as toothpaste and shampoo to 5 percent from 18 percent, and on small cars, air conditioners, and televisions to 18 percent from 28 percent.

The panel, which is headed by Sitharaman, approved the two-rate structure of 5 percent and 18 percent, instead of the four rates currently.

The new tax regime makes insurance premiums, including life and health coverage, tax-free.

The finance minister insisted the GST cuts were not linked to the “tariff turmoil”, saying they were part of long-planned reforms.

Federal and state governments are estimated to lose 480 billion Indian rupees ($5.49bn) due to the cuts that will be implemented from September 22, the first day of the Hindu festival of Navratri.

40 percent tax on ‘super luxury and ‘sin’ goods

Coupled with cuts in personal tax unveiled in February, the GST reductions are expected to boost consumption in the South Asian nation, whose economy grew at an unexpectedly higher pace of 7.8 percent in the quarter to June.

“The consumption boost in lieu of the GST rate rationalisation will more than neutralise any possible revenue impact,” said Soumya Kanti Ghosh, chief economist at SBI.

“The impact on fiscal deficit will be almost insignificant or even positive.”

The panel approved a tax of 40 percent on “super luxury” and “sin” goods such as cigarettes, cars with engine capacity exceeding 1,500 cubic centimetres (91.5cu inches), and carbonated beverages, the minister said.

The move is expected to boost sales of fast-moving consumer goods firms such as Hindustan Unilever and Godrej Industries, and consumer electronics companies such as Samsung Electronics, LG Electronics, and Sony.

Carmakers such as Maruti, Toyota Motor, and Suzuki Motor are expected to be big winners. The rush to cut the tax was triggered by Prime Minister Narendra Modi’s call for greater self-reliance in India, pledging last month to lower the GST by October to counter the US tariffs of up to 50 percent.

After the tax cuts announced on Wednesday, Modi said, “The wide-ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses.”

MEXICO CITY — Security, sovereignty, tariffs, trade, drugs and migration — all hot-button issues for the Trump administration and its neighbors in the Western Hemisphere — will top Secretary of State Marco Rubio’s agenda this week on his third trip to Latin America since becoming the chief U.S. diplomat.

In talks with leaders in Mexico and Ecuador on Wednesday and Thursday, Rubio will make the case that broader, deeper cooperation with the U.S. on those issues is vitally important to improving health, safety and security in the Americas and the Caribbean.

Yet, President Trump has alienated many in the region — far beyond the usual array of U.S. antagonists like Cuba, Nicaragua and Venezuela — with persistent demands, coupled with threats of sweeping tariffs and massive sanctions for not complying with his desires.

Mexico has been a focus for Trump

Mexico, the only country apart from Canada to share a border with the U.S., has been a particular target for Trump. He has demanded, and so far won, some concessions from Mexican President Claudia Sheinbaum’s government, which is eager to defuse the tariff threats.

Just a few hours before Rubio’s arrival Tuesday, Sheinbaum was set to lead a meeting of the country’s most important security forum, which brings together all 32 governors, the army, navy, federal prosecutor’s office and security commanders to coordinate actions across Mexico.

Sheinbaum had been talking for weeks about how Mexico was finalizing a comprehensive security agreement with the State Department that, among other things, was supposed to include plans for a “joint investigation group” to combat the flow of fentanyl and the drug’s precursors into the U.S. and weapons from north to south.

“Under no circumstance will we accept interventions, interference or any other act from abroad that is detrimental to the integrity, independence and sovereignty of the country,” she said Monday in her State of the Nation address marking her first year in office.

Last week, however, a senior State Department official downplayed suggestions that a formal agreement — at least one that includes protections for Mexican sovereignty — was in the works.

The official, who spoke on condition of anonymity to preview Rubio’s meetings, said sovereignty protections were “understood” by both countries without having to be formalized in a document.

Sheinbaum lowered her expectations Tuesday, saying during her morning news briefing that it would not be a formal agreement but rather a kind of memorandum of understanding to share information and intelligence on drug trafficking or money laundering obtained “by them in their territory, by us in our territory unless commonly agreed upon.”

Mexico’s president touts keeping close ties with the U.S.

Of her meeting with Rubio on Wednesday, she said it was always important to maintain good relations with the United States.

“There will be moments of greater tension, of less tension, of issues that we do not agree on, but we have to try to have a good relationship, and I believe tomorrow’s meeting will show that,” Sheinbaum said. “It is a relationship of respect and at the same time collaboration.”

To appease Trump, Sheinbaum has gone after Mexican cartels and their fentanyl production more aggressively than her predecessor. The government has sent the National Guard to the northern border and delivered 55 cartel figures long wanted by U.S. authorities to the Trump administration.

The Trump-Sheinbaum relationship also has been marked by tension, including the U.S. Drug Enforcement Administration announcing a new initiative with Mexico to combat cartels along the border that prompted an angry denial from Sheinbaum.

Despite American officials singing her praises, and constantly highlighting collaboration between the two countries, Trump glibly said last month: “Mexico does what we tell them to do.”

Migration and cartels are a focus of Rubio’s trip

In announcing the trip, the State Department said Rubio, who has already traveled twice to Latin America and the Caribbean and twice to Canada this year, would focus on stemming illegal migration, combating organized crime and drug cartels, and countering what the U.S. believes is malign Chinese behavior in its backyard.

He will show “unwavering commitment to protect [U.S.] borders, neutralize narco-terrorist threats to our homeland, and ensure a level playing field for American businesses,” the department said.

Rubio’s first foreign trip as secretary of state was to Panama, El Salvador, Guatemala and the Dominican Republic, during which he assailed Chinese influence over the Panama Canal and sealed deals with the others to accept immigrant deportees from the United States. Rubio later traveled to Jamaica, Guyana and Suriname.

The senior State Department official said virtually every country in Latin America is now accepting the return of their nationals being deported from the U.S. and, with the exception of Nicaragua, most have stepped up their actions against drug cartels, many of which have been designated foreign terrorist organizations by the U.S.

The official also said progress has been made in countering China in the Western Hemisphere.

Lee and Janetsky write for the Associated Press. AP writer María Verza in Mexico City contributed to this report.

Since President Donald Trump stared enacting tariffs earlier this year, everyone from Federal Reserve Chairman Jerome Powell to the average retail investor has been trying to figure out how they will affect the economy and whether they will reignite inflation.

So far, the economy and inflation seem to be OK. However, it’s still early, and the tariffs are constantly changing, which makes understanding the longer-term impact even more difficult.

The Trump administration and many in support of tariffs have said that they will not lead to higher inflation and have been lobbying Powell to lower interest rates. But make no mistake: President Trump has a tariff problem that could be a roadblock for a stock market hovering around all-time highs.

Somebody is going to have to bear the cost

Tariffs are a tax on imported goods, intended to make foreign goods more expensive, therefore aiding the competitive position of domestically made goods. So far, Trump’s tariffs have brought in significant revenue, including more than $29 billion in customs and excise taxes in July. In prior years, the monthly customs and excise taxes have amounted to less than $10 billion.

Official White House Photo by Tia Dufour.

However, most economists and other experts point out that someone has to foot the bill, which is why they are concerned about an eventual rebound in inflation. Up until now, inflation has remained subdued, or at least not risen like some expected, although core inflation rose in both June and July.

But the biggest indicator that higher inflation could be cooking came after a recent Producer Price Index (PPI) report. Although the PPI is not as widely followed as the Consumer Price Index (CPI), the July PPI certainly moved markets this month.

That index looks at the change in producer prices across industries and essentially serves as a gauge of wholesale inflation. What investors should think about is that if manufacturers are seeing price increases, how long until those funnel down and eventually hit consumers?

The July PPI increased 0.9% from the prior month, significantly higher than the consensus estimate of 0.2%. It was the biggest monthly increase since June of 2022, a period of extremely high inflation in the U.S.

CalBay Investments Chief Market Strategist Clark Geranen recently told CNBC: “The fact that PPI was stronger than expected and CPI has been relatively soft suggests that businesses are eating much of the tariff costs instead of passing them on to the consumer. Businesses may soon start to reverse course and start passing these costs to consumers.”

Prior to the PPI report, traders betting on changes in the federal funds rate had placed a nearly 99% chance that the Fed would cut interest rates at its September meeting. As of this writing on Aug. 19, that percentage had dropped to about 85%, according to CME Group‘s FedWatch tool.

The stock market is pricing in significant rate cuts

President Trump’s problem, in my view, is that the market is pricing in significant interest rate cuts. Between now and the end of 2026, the forward curve indicates there will be five cuts. While the market doesn’t necessarily want the Fed to have to make cuts due to some kind of severe recession or economic downturn, incremental cuts to support the economy and keep it on sound footing are expected to bolster the market, which seems to be a contributor in driving it to new all-time highs on numerous occasions this year.

Powell won’t cut rates five times if the Fed sees inflation moving higher, because that could put the economy in a stagflation scenario, where unemployment and inflation are both moving higher, making it more difficult for the Fed to achieve its dual mandate of stable prices and maximum employment.

I think the tariffs at the very least will keep the market and the Fed in a period of uncertainty, making it potentially difficult for the Fed to cut rates as much as the market hopes. With the stock market hovering near all-time highs and with a stretched valuation, I believe this dynamic could create a roadblock for the market.

WASHINGTON — President Trump has audaciously claimed virtually unlimited power to bypass Congress and impose sweeping taxes on foreign products.

Now a federal appeals court has thrown a roadblock in his path, ruling that he is violating the law.

The U.S. Court of Appeals for the Federal Circuit ruled Friday that Trump went too far when he declared national emergencies to justify imposing sweeping import taxes on almost every country.

The ruling largely upheld a May decision by a specialized federal trade court in New York. But the 7-4 appeals court decision tossed out a part of that ruling that would have overturned the tariffs immediately, allowing the Trump administration time to appeal to the U.S. Supreme Court.

The ruling was a big setback for Trump, whose trade policies have rocked financial markets, paralyzed businesses with uncertainty and raised fears of higher prices and slower economic growth.

Which tariffs did the court knock down?

The court’s decision centers on the tariffs — export taxes — Trump imposed in April on almost all U.S. trading partners and levies he imposed before that on China, Mexico and Canada.

Trump on April 2 — “Liberation Day,” he called it — imposed so-called reciprocal tariffs of up to 50% on countries with which the United States runs a trade deficit and 10% baseline tariffs on almost everybody else.

The president later suspended the reciprocal tariffs for 90 days to give countries time to negotiate trade agreements with the United States — and reduce their barriers to American exports. Some of them did — including the United Kingdom, Japan and the European Union — and agreed to lopsided deals with Trump to avoid even bigger tariffs.

Those that didn’t knuckle under — or otherwise incurred Trump’s wrath — got hit harder this month. Laos got rocked with a 40% tariff, for instance, and Algeria with a 30% levy. Trump also kept the baseline tariffs in place.

Claiming extraordinary power to act without congressional approval, Trump justified the taxes under the 1977 International Emergency Economic Powers Act, or IEEPA, by declaring the United States’ long-standing trade deficits “a national emergency.”

In February, he’d invoked the law to impose tariffs on Canada, Mexico and China, saying that the illegal flow of immigrants and drugs into the U.S. amounted to a national emergency and that the three countries needed to do more to stop it.

The U.S. Constitution gives Congress the power to set taxes, including tariffs. But lawmakers have gradually let presidents assume more power over tariffs — and Trump has made the most of it.

The court challenge does not cover other Trump tariffs, including levies on foreign steel, aluminum and autos that the president imposed after Commerce Department investigations concluded that those imports were threats to U.S. national security.

Nor does it include tariffs that Trump imposed on China in his first term — and President Biden kept — after a government investigation concluded that Beijing used unfair practices to give its technology firms an edge over rivals from the United States and other Western countries.

Why did the court rule against the president?

The administration had argued that courts had approved President Nixon’s emergency use of tariffs in the economic chaos that followed his decision to end a policy that linked the U.S. dollar to the price of gold. The Nixon administration successfully cited its authority under the 1917 Trading With the Enemy Act, which preceded and supplied some of the legal language used in the IEEPA.

In May, the U.S. Court of International Trade in New York rejected the argument, ruling that Trump’s April 2 tariffs “exceed any authority granted to the President’’ under the emergency powers law. In reaching its decision, the trade court combined two challenges — one by five businesses and one by 12 U.S. states — into a single case.

On Friday, the federal appeals court wrote in its 7-4 ruling that “it seems unlikely that Congress intended to … grant the President unlimited authority to impose tariffs.”

A dissent from the judges who disagreed with Friday’s ruling clears a possible legal path for Trump, concluding that the 1977 law allowing for emergency actions “is not an unconstitutional delegation of legislative authority under the Supreme Court’s decisions,” which have allowed Congress to grant some tariff authorities to the president.

So where does this leave Trump’s trade agenda?

The government has argued that if Trump’s tariffs are struck down, it might have to refund some of the import taxes that it’s collected, delivering a financial blow to the U.S. Treasury. Revenue from tariffs totaled $159 billion by July, more than double what it was at the same point the year before. Indeed, the Justice Department warned in a legal filing this month that revoking the tariffs could mean “financial ruin” for the United States.

It could also put Trump on shaky ground in trying to impose tariffs going forward.

“While existing trade deals may not automatically unravel, the administration could lose a pillar of its negotiating strategy, which may embolden foreign governments to resist future demands, delay implementation of prior commitments, or even seek to renegotiate terms,” Ashley Akers, senior counsel at the Holland & Knight law firm and a former Justice Department trial lawyer, said before the appeals court decision.

The president promptly said he would appeal the ruling to the Supreme Court. “If allowed to stand, this Decision would literally destroy the United States of America,” he wrote on his social media platform.

Trump does have alternative laws for imposing import taxes, but they would limit the speed and severity with which he could act.

For instance, in its decision in May, the trade court noted that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and to just 150 days on countries with which the United States runs big trade deficits.

The administration could also invoke levies under a different legal authority — Section 232 of the Trade Expansion Act of 1962 — as it did with tariffs on foreign steel, aluminum and autos. But that requires a Commerce Department investigation and cannot be imposed merely at the president’s own discretion.

Wiseman and Whitehurst write for the Associated Press.

A United States appeals court has declared President Donald Trump’s blanket tariff policy illegal, but it stopped short of pausing the wide-ranging import taxes altogether.

On Friday, the Court of Appeals for the Federal Circuit in Washington, DC, largely upheld a decision in May that found Trump had overstepped his authority in imposing universal tariffs on all US trading partners.

Trump had invoked the International Emergency Economic Powers Act (IEEPA) to justify the move, claiming that trade deficits with other countries constituted a “national emergency”.

But the appeals court questioned that logic in Friday’s ruling, ruling seven to four against the blanket tariffs.

“The statute bestows significant authority on the President to undertake a number of actions in response to a declared national emergency,” the court wrote.

“But none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.”

The Trump administration is expected to appeal to the Supreme Court, and the appeals court therefore said his tariff policy could remain in place until October 14.

That was a departure from the May ruling, which included an injunction to immediately halt the tariffs from taking effect.

What is this case about?

The initial May decision was rendered by the New York-based US Court of International Trade, a specialised court that looks exclusively at civil actions pertaining to cross-border trade.

That case was one of at least eight challenges against Trump’s sweeping tariff policies.

Trump has long maintained that the US’s trading partners have taken advantage of the world’s largest economy, and he has depicted trade deficits – when the US imports more than it exports – as an existential threat to the economy.

But experts have warned that trade deficits are not necessarily a bad thing: They could be a sign of a strong consumer base, or the result of differences in currency values.

Still, on April 2, Trump invoked the IEEPA to impose 10-percent tariffs on all countries, plus individualised “reciprocal” tariffs on specific trading partners.

He called the occasion “Liberation Day“, but critics noted that the global markets responded to the tariff announcements by stumbling downward.

A few days later, as the “reciprocal” tariffs were slated to take effect, the Trump administration announced a pause for nearly every country, save China. In the meantime, Trump and his officials said they would seek to negotiate trade deals with global partners.

A new slate of individualised, country-specific tariffs was unveiled in July in the form of letters Trump posted to his social media account. Many of them took effect on August 1, including a 50-percent tariff on Brazil for its prosecution of a Trump ally, former President Jair Bolsonaro.

Just this week, on August 27, India was also slapped with a 50-percent tariff as a result of its purchase of oil from Russia.

Mexico, Canada and China, meanwhile, have faced Trump’s tariff threats since February, with Trump leveraging the import taxes to ensure compliance with his policies on border security and the drug fentanyl.

What are the arguments?

US presidents do have limited power to issue tariffs in order to protect specific domestic industries, and Trump has exercised that power in the case of imported steel, aluminium and automobile products.

But in general, the US Constitution places the power to issue taxes, including tariffs, under Congress, not the presidency.

Lawsuits like Friday’s have therefore argued that Trump has exceeded his presidential authority in levying blanket tariffs.

The appeals court decision also pointed out that the IEEPA does not give the presidency unchecked power.

“It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs,” the ruling said.

The decision came in response to two lawsuits: one filed by the nonpartisan Liberty Justice Center, on behalf of five US small businesses, and the other by 12 US states.

Still, on his social media platform Truth Social, Trump appeared defiant, emphasising that his tariffs would remain in place despite the appeals court’s decision.

“ALL TARIFFS ARE STILL IN EFFECT! Today a Highly Partisan Appeals Court incorrectly said that our Tariffs should be removed, but they know the United States of America will win in the end,” he wrote.

He added that it was his view that tariffs “are the best tool to help our Workers”. He also implied he expected the Supreme Court to back him up in his appeal.

“If these Tariffs ever went away, it would be a total disaster for the Country. It would make us financially weak, and we have to be strong,” Trump said.

“Tariffs were allowed to be used against us by our uncaring and unwise Politicians. Now, with the help of the United States Supreme Court, we will use them to the benefit of our Nation.”

The ‘de minimis’ import tax exemption helped fuel home delivery and the rise of e-commerce in the US.

The US has suspended tariff exemptions for small delivery packages valued at $800 or less, ending a loophole that allowed more than one billion packages to enter the US last year without customs duties.

The loophole is due to end on Friday in the US, followed by a six-month transition period to a new tariff regime.

More than 30 countries, including Australia, Germany, Japan and Mexico, have suspended or partially suspended package shipments to the US in advance of the cost change.

Postal unions around the world say more clarity is needed about how the tariff will be calculated before they resume shipments to the US.

Global logistics giant DHL said it would not ship standard business parcels to the US until “unresolved” questions are answered regarding “how and by whom customs duties will be collected in the future”, and “how the data transmission to the US Customs and Border Protection will be carried out”.

A White House fact sheet released on July 30 stated that tariff rates on small packages will be calculated in one of two ways starting August 29.

The first option sets a flat rate of $80 to $200 per item, depending on the country of origin. The second option is based on the value of the package and the “reciprocal” tariff rate set by the White House for individual countries.

The flat rate will only be available for the next six months, after which all small packages will be subject to a tariff of 10 to 40 percent for most countries.

The White House set its “reciprocal” tariff rates in July for most trade partners, although negotiations are ongoing with key trade partners Mexico and China.

The administration of President Donald Trump says that tariffs are necessary to lower the US trade deficit, while ending the “de minimis exemption” – which lets people off on paying import tax on small items – will help slow the movement of narcotics posted across borders.

The de minimis exemption has been in place since the 1930s, but it played a critical role in the US economy after it was raised from $200 to $800 in 2015. The exemption on import tax on items valued less than $800 helped pave the way for international e-commerce by letting retailers ship directly to the customer.

Over the past decade, the number of packages crossing the US border each year rose tenfold from 129 million to 1.36 billion, according to US customs data.

The exemption also previously allowed Chinese e-commerce giants like Shein and Temu to avoid paying tariffs set on Chinese goods during Trump’s first term in office.

US tariff exemption on packages worth $800 or less due to end this week.

Mexico says it will suspend package shipments to the United States before the end of a tariff exemption for small-value packages.

The announcement on Wednesday follows similar moves by postal services from several European countries, including Germany, Denmark, Sweden, Italy, and the United Kingdom, as they await  further details from the US government.

The “de minimis” exemption has allowed packages worth less than $800 to enter the US tariff-free since 2016, but the loophole is set to expire on Friday.

The change is expected to dent the business of Chinese e-commerce platforms like Shein and Temu – which have evaded US tariffs by mailing directly to customers – but it has also created confusion for other US trade partners. Mexico said it will suspend shipments pending more details from Washington about new duties.

“Mexico continues its dialogue with US authorities and international postal organisations to define mechanisms that will allow for the orderly resumption of services, providing certainty to users and avoiding setbacks in the delivery of goods,” the government said.

Shipping giant DHL said “key questions remain unresolved, particularly regarding how and by whom customs duties will be collected in the future, what additional data will be required, and how the data transmission to the US Customs and Border Protection will be carried out.”

The White House announced plans to suspend the de minimis exemption for all countries on July 30, as part of US President Donald Trump’s wider trade war.

The exemption was previously suspended for China, Hong Kong, Mexico, and Canada due to concerns about the flow of fentanyl and other drugs over the US border.

A White House Fact Sheet released on July 30 said two schemes may be used to calculate tariffs for small packages.

The first is calculated based on the value of the package, while the second scheme sets a tariff of $80 to $200 per item.

Both rates are based on the blanket tariff set by the Trump administration for most US trade partners in August, ranging from 10 to 40 percent.

The White House has also imposed tariffs on individual sectors, such as semiconductors, steel and aluminium, vehicles and auto parts.

Mexico is still negotiating its tariff rate with the US, and has pledged to raise tariffs on Chinese goods and take tougher measures against drug cartels to secure a deal with Trump. Some goods, however, will still be covered by the 2020 free trade US-Mexico-Canada Agreement.

Washington’s move to double tariffs on many Indian goods poses a huge risk to India’s biggest export market.

The United States has doubled tariffs on many imports from India to 50 percent, as US President Donald Trump followed through on his threat to punish New Delhi for buying discounted Russian oil.

The steep tariffs, which came into force on Wednesday, risk inflicting significant damage on the Indian economy by threatening trade with its largest export market. India exported more than $87bn worth of goods to the US in 2024.

The Indian government, which has criticised the move as “unfair, unjustified and unreasonable”, estimates the tariffs will impact more than $48bn worth of exports. Indian officials warn that the new duties could make exports to the US commercially unviable, leading to job losses and slowing growth in the world’s fifth-largest economy, The Associated Press news agency reported.

The US had already slapped 25 percent tariffs on Indian goods earlier this month, as part of a wave of additional duties on goods from allies and competitors alike since Trump returned to the White House.

But the latest hike on Indian products doubles that rate, in a move to punish New Delhi for buying Russian oil, which the White House argues is indirectly funding Russia’s war on Ukraine.

More than one-third of India’s crude oil imports came from Russia last year, a trade relationship that has spurred criticism from Washington. Trump’s trade adviser, Peter Navarro, told reporters last week that “India doesn’t appear to want to recognise its role in the bloodshed” in Ukraine.

The move leaves Indian exporters facing among the highest US duties Trump has slapped on goods from overseas. Brazil is also grappling with 50 percent tariffs on many of its exports to the US.

‘Strategic shock’

Garima Kapoor, Executive Vice President and Economist at Elara Securities, told Al Jazeera that the impact would likely be felt in labour intensive industries such as textiles, garments, gems and jewellery, marine exports, some auto exports and leathers.

“All of these categories … are small and medium scale enterprise intensive. So we will see an impact being pretty severe in terms of employment.”

A New Delhi-based think tank, Global Trade Research Initiative (GTRI), says the tariffs could eliminate India’s presence in the US.

“The new tariff regime is a strategic shock that threatens to wipe out India’s long-established presence in the US, causing unemployment in export-driven hubs and weakening its role in the industrial value chain,” Ajay Srivastava, GTRI founder and former Indian trade official, told the AP.

The US has, for now, exempted some key sectors, such as pharmaceuticals and electronic goods, from additional tariffs. The Trump administration has launched investigations into these and other sectors that could yet result in further duties.

The tariffs come as the Trump administration pushes for greater access to India’s agriculture and dairy sectors, amid Indian resistance to opening the sectors to cheaper US imports.

Prime Minister Narendra Modi has said India should not yield to the pressure.

“For me, the interests of farmers, small businesses and dairy are topmost. My government will ensure they aren’t impacted,” Modi said at a rally this week in his home state of Gujarat.

India and China have agreed to step up trade flows and resume direct flights in a major diplomatic breakthrough, as the two most populous nations try to rebuild ties damaged by a 2020 deadly border clash and amid US President Donald Trump’s unpredictable foreign policy.

The two rivals also agreed to advance talks on their disputed border during Chinese Foreign Minister Wang Yi’s two-day visit to India.

The rebuilding of India-China ties coincides with friction between New Delhi and Washington, following the recent imposition of steep tariffs on India by the Trump administration.

So why did India and China decide to mend their ties, and what steps were taken to address their border dispute?

What specific points were agreed?

Discussions covered a range of issues related to withdrawing tens of thousands of troops that both countries have amassed along their Himalayan border, boosting investment and trade flows, hosting more bilateral events, and enhancing travel access.

The Asian neighbours agreed to reopen several trading routes – namely the Lipulekh Pass, Shipki La Pass and Nathu La Pass. An expert group will also be established to explore “early harvest” steps (i.e. mini-agreements that can be implemented quickly before the conclusion of a more complex deal) to improve border management, a move India had previously opposed.

In the past, India was keen to avoid a situation where China secured partial gains up front, but where its territorial integrity concerns remained unresolved. India’s opposition has accused the government of ceding territory to China.

Elsewhere, China has reportedly agreed to address India’s concerns over its export curbs on fertilisers, rare earth minerals and tunnel-boring machines, according to Indian media reports.

But Chinese Foreign Ministry Spokesperson Mao Ning, when asked about Indian media reports on the lifting of export controls, said she was not familiar with the media reports.

“As a matter of principle, China is willing to strengthen dialogue and cooperation with relevant countries and regions to jointly maintain the stability of the global production and supply chain,” she said in a media briefing on Wednesday.

New Delhi and Beijing also agreed to resume direct flights between the two countries, enhance river-sharing data and drop certain visa restrictions for tourists, businesses and journalists.

Who said what?

During his two-day trip, Wang Yi held meetings with Indian Prime Minister Narendra Modi and India’s National Security Adviser Ajit Doval, encounters that will pave the way for Modi’s first visit to China in seven years at the end of August.

“Stable, predictable, constructive ties between India and China will contribute significantly to regional as well as global peace and prosperity,” Modi posted on X after his meeting with Wang.

Meanwhile, Doval said that China and India had achieved a “new environment” of “peace and tranquillity”. He added that “the setbacks that we faced in the last few years were not in our interest”, and “delimitation and boundary affairs” had been discussed.

A readout from China’s Foreign Ministry said Wang told Doval that “the stable and healthy development of China-India relations is in the fundamental interests of the two countries’ people”.

The two sides “should enhance mutual trust through dialogues and expand cooperation”, Wang said, and should aim for consensus in areas such as border control and demarcation negotiations.

Looking ahead, Modi is scheduled to travel to China at the end of this month to take part in the summit of the Shanghai Cooperation Organisation – his first visit to the country since June 2018.

Why did relations sour in the first place?

Relations between the two countries plummeted in 2020 after security forces clashed along their Himalayan border. Four Chinese soldiers and 20 Indian soldiers were killed in the worst violence in decades, freezing high-level diplomatic relations.

The chill in relations after the deadly Ladakh clash – the first fatal confrontation between India and China since 1975 – also affected trade and air travel, as both sides deployed tens of thousands of security forces in border areas.

Following the border tensions, India imposed curbs on Chinese investments in the country. Months later, New Delhi banned dozens of Chinese apps, including TikTok, owned by China’s ByteDance, citing security concerns.

But despite the soaring tensions, the bilateral trade between the two countries did not see a drastic drop, and in fact, New Delhi’s imports from Beijing have grown to more than $100bn from $65nb in the financial year 2020-2021 as the country’s electronics and pharma industries heavily rely on raw materials from China.

On Monday, Wang said, “The setbacks we experienced in the past few years were not in the interest of the people of our two countries. We are heartened to see the stability that is now restored on the borders.”

For his part, Modi emphasised the importance of maintaining peace and tranquillity on the border and reiterated India’s commitment to a “fair, reasonable and mutually acceptable resolution of the boundary question”, his office said in a statement on Tuesday.

Why did the two sides decide to mend ties?

The geopolitical disruption caused by Donald Trump’s trade wars has helped create an opening for Asia’s leading and third-largest economies to try to mend their diplomatic and economic relations.

Indeed, the improvement in ties has accelerated since Trump increased tariffs on both countries earlier this year – particularly India, which had been pursuing a closer relationship with the United States in a joint front against China.

Moreover, India and the US have been haggling over free trade agreements for months, with Trump accusing India of denying access to American goods due to higher tariffs. China has also been locked in months-long trade negotiations with the US.

China and India increased official visits and discussed relaxing some trade restrictions and easing the movement of citizens since Modi met Chinese President Xi Jinping in Kazan, Russia last October. In June, Beijing even allowed pilgrims from India to visit holy sites in Tibet while India issued tourist visas to Chinese nationals in a sign of improving ties.

But Trump’s decision to declare a 25 percent “reciprocal” tariff on India in June over the country’s imports of Russian oil – and his move a week later to raise it again to 50 percent – have hastened dramatic diplomatic realignment. Even the US’s close allies – South Korea and Japan – have not been spared by Trump’s tariffs.

Top Trump officials have accused India of funding Russia’s war in Ukraine, with US Treasury Secretary Scott Bessent on Tuesday accusing India of “profiteering”.

But China’s imports of Russian oil are even larger than India’s. And on August 12, the US extended a tariff truce on Beijing for another 90 days – staving off triple-digit tariffs. In turn, New Delhi has accused Washington of double standards over its tariff policy.

Suhasini Haidar, an Indian journalist writing in the newspaper The Hindu, said that the rationale behind the US sanctions on India is “dubious”. “The US has itself increased its trade with Russia since Trump came to power,” she wrote.

US Treasury Secretary Bessent, however, has defended Washington’s decision not to impose secondary sanctions against China, saying Beijing “has a diversified input of their oil”. Beijing’s import of Russian oil, he said, went from 13 percent to 16 percent while India’s went from less than one percent to over 40 percent.

Trump’s claim that he secured a ceasefire between India and Pakistan has further caused anger in India, which has refused to give credit to the US president for the May 10 ceasefire that stopped the five-day war between the nuclear-armed neighbours. Trump’s hosting of the Pakistan Army’s General Asim Munir has not helped the cause, either.

US-India relations have frayed despite Modi cultivating personal ties with Trump, particularly during his first term. The Indian prime minister was Trump’s first guest in his second term in February, when he coined the slogan “Make India Great Again” (MIGA), borrowing from Trump’s “Make America Great Again” (MAGA) base. “MAGA plus MIGA becomes a mega partnership for prosperity,” Modi said.

But Trump’s repeated attacks on India have poured cold water on “the partnership”, with Indian foreign policy experts fearing the ties are headed towards uncharted territory.

“At risk is three decades of India’s economic ascent, and its careful positioning as an emerging power, shaped in the shadow of US strategic backing,” wrote Sushant Singh, a lecturer in South Asian studies at Yale University, in the Financial Times. “Trump has shredded India’s road map; it could be replaced by strategic drift, realignment or eventual rapprochement.”

The turbulence in India-US ties has forced New Delhi to repair ties with its adversary China, which supplies military equipment to Pakistan and took the side of Islamabad during the recent war.

Amid Trump’s trade war, New Delhi and Beijing have joined forces to improve trade and people-to-people contact.

The new developments may also boost relations between members of the BRICS bloc – with India and China being the group’s founding members, along with Brazil, Russia and South Africa. India and China will host the 2026 and 2027 BRICS summits, respectively. Trump has also railed against BRICS nations, warning the member nations against challenging the US dollar.

US President Donald Trump signed an extension just before midnight in Beijing, when a pause on tariffs was set to expire.

United States President Donald Trump has signed an executive order extending the China tariff deadline for another 90 days.

The extension came only hours before midnight in Beijing, when the 90 day pause was set to expire, CNBC reported on Monday, citing a White House official.

The White House did not immediately respond to Al Jazeera’s request for comment.

Earlier on Monday, Trump said he has been “dealing very nicely with China” as Beijing said it was seeking positive outcomes.

If the deadline had passed, duties on Chinese goods would have returned to where they were in April at 145 percent, further fuelling tensions between the world’s two largest trading partners.

While the US and China slapped escalating tariffs on each other’s products this year, reaching prohibitive triple-digit levels and snarling global trade, both countries in May agreed to temporarily lower tariffs at a meeting between negotiators in Geneva, Switzerland.

But the pause comes as negotiations still loom. Asked about the deadline on Monday, Trump said: “We’ll see what happens. They’ve been dealing quite nicely. The relationship is very good with [China’s] President Xi [Jinping] and myself.”

“We hope that the US will work with China to follow the important consensus reached during the phone call between the two heads of state,” said Chinese Foreign Ministry spokesman Lin Jian in a statement.

He added that Beijing also hopes Washington will “strive for positive outcomes on the basis of equality, respect and mutual benefit”.

In June, key economic officials convened in London as disagreements emerged and US officials accused their counterparts of violating the pact. Policymakers again met in Stockholm last month.

Even as both countries appeared to be seeking to push back the reinstatement of duties, US trade envoy Jamieson Greer said last month that Trump will have the “final call” on any such extension.

Ongoing negotiations

Kelly Ann Shaw, a senior White House trade official during Trump’s first term and now with Akin Gump Strauss Hauer & Feld, said she expected Trump to extend the 90-day “tariff detente” for another 90 days later on Monday.

“It wouldn’t be a Trump-style negotiation if it didn’t go right down to the wire,” she said.

“The whole reason for the 90-day pause in the first place was to lay the groundwork for broader negotiations, and there’s been a lot of noise about everything from soybeans to export controls to excess capacity over the weekend,” she said.

Ryan Majerus, a former US trade official now with the King & Spalding law firm, welcomed the news.

“This will undoubtedly lower anxiety on both sides as talks continue, and as the US and China work toward a framework deal in the fall. I’m certain investment commitments will factor into any potential deal, and the extension gives them more time to try and work through some of the longstanding trade concerns,” he said.

For now, fresh US tariffs on Chinese goods this year stand at 30 percent, while Beijing’s corresponding levy on US products is at 10 percent.

Since returning to the presidency in January, Trump has slapped a 10-percent “reciprocal” tariff on almost all trading partners, aimed at addressing trade practices Washington deemed unfair.

Markets are relatively flat on the news of extension. The Nasdaq is down by 0.07 percent, the S&P 500 is down 0.08 percent. Meanwhile, the Dow Jones Industrial Average is down by about 0.4 percent at 3:30pm in New York (19:30 GMT).

India is signaling it may seek to rebalance its global partnerships after Trump’s salvo of tariffs on Indian goods.

Indian Prime Minister Narendra Modi and Brazil’s President Luiz Inacio “Lula” da Silva have spoken by phone, their offices said, discussing a broad range of topics that included tariffs imposed by the United States on goods from both countries.

Lula confirmed a state visit to India in early 2026 during the call on Thursday, which occurred a day after the Brazilian leader told the news agency Reuters that he would initiate a conversation among the BRICS group of countries on tackling US President Donald Trump’s levies, which are the highest on Brazil and India.

The group of major emerging economies also includes China, Russia and South Africa.

“The leaders discussed the international economic scenario and the imposition of unilateral tariffs. Brazil and India are, to date, the two countries most affected,” Lula’s office said in a statement.

Trump announced an additional 25 percent tariff on Indian goods on Wednesday, raising the total duty to 50 percent. The additional tariff, effective August 28, is meant to penalise India for continuing to buy Russian oil, Trump has said.

Trump has also slapped a 50 percent tariff on goods from Brazil, with lower levels for sectors such as aircraft, energy and orange juice, tying the move to what he called a “witch hunt” against former President Jair Bolsonaro, a right-wing ally on trial for an alleged coup plot to overturn his 2022 election loss.

On their call, Lula and Modi reiterated their goal of boosting bilateral trade to more than $20bn annually by 2030, according to the Brazilian president’s office, up from roughly $12bn last year.

Brasilia said they also agreed to expand the reach of the preferential trade agreement between India and the South American trade bloc Mercosur, and discussed the virtual payment platforms of their countries.

Modi’s office, in its statement, did not explicitly mention Trump or US tariffs, but said “the two leaders exchanged views on various regional and global issues of mutual interest.”

India is already signalling it may seek to rebalance its global partnerships after Trump’s salvo of tariffs on Indian goods.

Modi is preparing for his first visit to China in more than seven years, suggesting a potential diplomatic realignment amid growing tensions with Washington. The Indian leader visited Lula in Brasilia last month.

Commerce Secretary Howard Lutnick forecasts the revenue increase even as Trump announces higher pharma and semiconductor chip levies, which have yet to kick in.

The United States expects to bring in at least $50bn a month from tariffs as higher levies on imports from dozens of countries begin to kick in.

US Commerce Secretary Howard Lutnick on Thursday outlined the forecasted revenue, an increase of $20bn from last month, when tariffs brought in $30bn.

“And then you’re going to get the semiconductors, you’re going to get pharmaceuticals, you’re going to get all sorts of additional tariff money coming in,” Lutnick said in an interview with Fox Business Network.

US President Donald Trump’s higher tariffs on imports from dozens of countries took effect on Thursday, raising the average US import duty to its highest in a century, with countries facing tariffs of 10 percent to 50 percent.

Trump on Wednesday also announced plans to levy a tariff of about 100 percent on imported semiconductor chips unless manufacturers commit to producing in the US, as well as a small tariff on pharmaceutical imports that would rise to 250 percent over time.

Details of those sectoral tariffs are expected in the coming weeks after the Commerce Department completes investigations into the impact of those imports on US national security.

Lutnick told Fox Business Network that companies could win exemptions from the expected semiconductor tariff if they filed plans to build plants in the US, and those plans were overseen by an auditor.

“[Trump’s] objective is to get semiconductor manufacturing done here,” he said, predicting that the initiative would result in some $1 trillion in investment to bolster domestic manufacturing.

Other exemptions have already been agreed, including with the European Union, which said its agreement to accept a 15 percent tariff on most EU exports includes chips, and with Japan, which has said the US agreed not to give it a worse rate than other countries.

The push to boost domestic chip manufacturing is not new.

The US Congress created a $52.7bn semiconductor manufacturing and research subsidy programme in 2022 under former President Joe Biden, and all five leading-edge semiconductor firms agreed last year to locate chip factories in the US.

Last year, the Commerce Department said the US produced about 12 percent of semiconductor chips globally, down from 40 percent in 1990.

Lutnick, asked about separate talks under way with China on extending a tariff truce that is due to end on August 12, said he felt an agreement was possible.

“I think we’re going to leave that to the trade team and to the president to make those decisions,” he said. “It feels likely that they’re going to come to an agreement and extend that for another 90 days, but I’ll leave it to that team.”

Even as the United States slaps India with a 50 percent tariff, the highest among all countries so far and one that will push their relationship to its lowest moment in years, one thing is clear: US President Donald Trump is more interested in onshoring than friend-shoring, experts say.

On Wednesday, the US announced an additional 25 percent tariff on India over its import of Russian oil, taking the total to 50 percent. The move caught most experts by surprise as New Delhi was one of the first to start trade negotiations with Washington, DC, and Trump and Indian Prime Minister Narendra Modi have repeatedly admired each other in public statements and called each other friends. Brazil is the only other country facing tariffs as high as India’s.

“The breakdown of the trade negotiations was a surprise,” said Vina Nadjibulla, vice president of strategy and research at the Asia Pacific Foundation of Canada.

“This is a very difficult moment, arguably the worst in many, many years in their relationship and puts India in a very small group of countries that find themselves without a deal and with the highest tariff rates. They now need some pragmatic path forward and need to find a way to rebuild trust,” Nadjibulla said.

While the 50 percent tariffs, set to kick in in three weeks, have come as a shock, there has been a series of events in the past few weeks that hinted at disagreements between the two countries.

Just last week, Trump threatened that he would penalise New Delhi for buying Russian oil and arms, venting his frustration over an impasse in trade talks and referred to both countries as “dead economies”.

Negotiations deadlock

Last year, bilateral trade between India and the US stood at approximately $212bn, with a trade gap of about $46bn in India’s favour. Modi has said in the past that he plans to more than double trade between the two countries to $500bn in the next five years.

As part of the tariff negotiations, New Delhi had offered to remove levies from US industrial goods and said it would increase defence and energy purchases, the Reuters news agency reported. It also offered to scale back taxes on cars, despite a strong auto lobby at home pressuring it not to.

But it refused to remove duties from farm and dairy products, two politically sensitive sectors that employ hundreds of millions of predominantly poor Indians, and a stance similar to some other countries like Canada.

There are also geopolitical layers to what was supposed to be a trade conversation, pointed out Farwa Aamer, director of South Asia Initiatives at the Asia Society Policy Institute in New York.

A very public one was the difference in perception on how the latest clash between India and archenemy Pakistan in May was brought to an end. Trump has repeatedly said that he mediated a ceasefire. India has repeatedly said that Trump had no role in bringing about a truce and has said that Modi and Trump never spoke during the conflict.

Pakistan, on the other hand, has said it will nominate Trump for the Nobel Peace Prize and has so far walked away with deals with the US to explore its reserves of critical minerals and oil as its efforts to reset ties with the US play out after years of ambivalence under former US President Joe Biden, said Aamer.

All of this has caused unease for New Delhi, which is now trying to navigate a tough road. “This will test India’s foreign policy,” said Aamer, “and the question is if we will see it grow with the US even as it maintains its ties with Russia,” its longstanding defence and trade partner.

New Delhi has called Wednesday’s tariff “unfair, unjustified and unreasonable” and said its imports of Russian oil are based on its objective of securing the energy needs of its nation of 1.4 billion people.

But beyond that, “India doesn’t want to look weak”, said Aamer. “India has this global standing, and Modi has this global standing, so it has to hold its own. It will maintain its stance that its national security is driving its foreign policy.”

Robert Rogowsky, a professor of international trade at the Middlebury Institute of International Studies at Monterey, said he expected “very creative diplomacy” in the “near term” as India and the US try to reset ties despite tensions.

“Strong-arming individuals like Modi will inevitably lead to shifts and counter-shifts,” he told Al Jazeera.

Adding instability

For now, India can focus on strengthening its bilateral trade agreements, said Aamer, such as the one it signed with the United Kingdom last month and another with the European Union, which is currently in the works.

India is also trying to stabilise relations with China –  just as Australia, Canada and Japan have done in recent months since Trump took office and hit allies with tariffs. Modi is planning to attend the Shanghai Cooperation Organisation summit at the end of the month. It would be his first visit to China since the two countries had a face-off in 2020 in the Galwan River valley.

But the trade blow from the US also comes at a time when India has been trying to position itself as a manufacturing hub and as an option for businesses that were looking to add locations outside China.

In April, Apple, for instance, said all iPhones meant to be sold in the US would be assembled in India by next year. While electronics are exempt for now from the tariffs, a country with a 50 percent tariff tag on it is hardly attractive for business, and this just “adds to the instability and uncertainty that businesses were already feeling” because of all the Trump tariffs, Nadjibulla said.

“Trump has made it clear that he’s interested in onshoring rather than friend-shoring.”

US President Donald Trump said the tariff will not impact companies if they have already invested in US facilities.

United States President Donald Trump says he will impose a 100 percent tariff on foreign-made semiconductors, although exemptions will be made for companies that have invested in the US.

“We’ll be putting a tariff on of approximately 100 percent on chips and semiconductors, but if you’re building in the United States of America, there’s no charge, even though you’re building and you’re not producing yet,” Trump told reporters at the Oval Office on Wednesday evening.

The news came after a separate announcement that Apple would invest $600bn in the US, but it was not unexpected by US observers.

Trump told CNBC on Tuesday that he planned to unveil a new tariff on semiconductors “within the next week or so” without offering further details.

Details were also scant at the Oval Office about how and when the tariffs will go into effect, but Asia’s semiconductor powerhouses were quick to respond about the potential impact.

Taiwan, home of the world’s largest chipmaker TSMC, said that the company would be exempt from the tariff due to its existing investments in the US.

“Because Taiwan’s main exporter is TSMC, which has factories in the United States, TSMC is exempt,” National Development Council chief Liu Chin-ching told the Taiwanese legislature.

In March, TSMC – which counts Apple and Nvidia as clients – said it would increase its US investment to $165bn to expand chip making and research centres in Arizona.

South Korea was also quick to extinguish any concerns about its top chipmakers, Samsung and SK Hynix, which have also invested in facilities in Texas and Indiana.

Trade envoy Yeo Han-koo said South Korean companies would be exempt from the tariff and that Seoul already faced “favourable” tariffs after signing a trade deal with Washington earlier this year.

TSMC, Samsung and SK Hynix are just some of the foreign tech companies that have invested in the US since 2022, when then-President Joe Biden signed the bipartisan CHIPS Act offering billions of dollars in subsidies and tax credits to re-shore investment and manufacturing.

Less lucky is the Philippines, said Dan Lachica, president of Semiconductor and Electronics Industries in the Philippines Foundation.

He said the tariffs will be “devastating” because semiconductors make up 70 percent of the Philippines’ exports.

Trump’s latest round of blanket tariffs on US trade partners is due to go into effect on Thursday, but the White House has also targeted specific industries like steel, aluminium, automobiles and pharmaceuticals with separate tariffs.

Apple, which was singled out by the Trump administration earlier this year over its production practices, plans to take a further step to highlight its commitment to boosting investment in the U.S.

The tech giant will pledge to spend an additional $100 billion on domestic manufacturing, a move that could ease tensions between the tech giant and President Trump who wants iPhones built in the United States.

A White House official on Wednesday said Trump will announce a new manufacturing program aimed to bring more of Apple’s supply chain to the United States, confirming an earlier report from Bloomberg.

Apple’s commitment will increase the Cupertino-based company’s U.S. investment to $600 billion over four years as it seeks to avoid the cost of tariffs.

The company announced a $500-billion U.S. investment commitment in February.

Nonetheless, Trump in May criticized Apple for expanding iPhone production in India, threatening to hit the company with a 25% tariff.

Apple and other tech companies have touted their U.S. commitments, but analysts and economists have said shifting manufacturing to the United States could take years and result in higher prices for smartphones and other popular electronics.

Some analysts have said it would take at least five years for Apple to shift production to the U.S. and the prices of iPhones could reach $3,500 if the smartphone was made in America.

The iPhone 16 Pro is made up of roughly 2,700 parts sourced from 187 suppliers in 28 countries, according to an April report from TechInsights.

As companies look to keep costs down and consumers watch their budgets, tariffs add another wrinkle to efforts to slash spending.

Taylor Rogers, a White House spokesperson, said in a statement, that the Trump and Apple’s announcement is “another win for our manufacturing industry that will simultaneously help reshore the production of critical components to protect America’s economic and national security.”

This week, Trump said he was doubling tariffs on India to 50%, stating in an executive order that the country’s government “is currently directly or indirectly importing Russian Federation oil.”

Apple didn’t respond to a request for comment.

The move marks the latest apparent effort by Apple to show its commitment to hiring U.S. workers.

Last month, the smartphone leader announced the opening of its Apple Manufacturing Academy in Detroit. The program begins Aug. 19 and offers free workshops on artificial intelligence and advanced manufacturing to small and medium-sized businesses.

Apple has more than 450,000 jobs with thousands of suppliers and partners across all 50 states.

While Apple designs its products in California, it also relies on a global supply chain involving various countries including China, Vietnam and India.

Apple is already spending more because of Trump’s tariffs. Last week, Apple Chief Executive Tim Cook said during an earnings call that the company has incurred roughly $800 million in tariff-related costs. Apple expects $1.1 billion in tariff-related costs in the fiscal fourth quarter ending in September.

Aug. 6 (UPI) — President Donald Trump on Wednesday raised tariffs on goods imported from India to 50% in response to the country’s continued purchase of Russian oil.

“I find that the Government of India is currently directly or indirectly importing Russian Federation oil,” President Donald Trump said in an executive order.

“Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25%,” the executive order said.

This adds to the previous 25% tariffs set to take effect Thursday. The new tax will begin in 21 days.

The India tariff is now one of the highest on all of the United States’ trading partners, and it’s the latest sign that Trump is honoring his threat on countries that buy oil from Russia. The tariff is meant to put pressure on Russian President Vladimir Putin to encourage him to work toward a peace agreement with Ukraine.

On Tuesday, Trump said he would raise the tariff on India “very substantially over the next 24 hours, because they’re buying Russian oil, they’re fueling the war machine.”

“And if they’re going to do that, then I’m not going to be happy,” Trump said on CNBC’s Squawk Box.

In response to Trump’s Monday threat, India accused the United States, and the European Union, of hypocrisy, saying they began importing from Russia “because traditional supplies were diverted to Europe after the outbreak of the conflict.”

“India’s imports are meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by global market situation,” India’s foreign ministry said in a statement. “However, it is revealing that the very nations criticizing India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion.”

It said the targeting of India was “unjustified and unreasonable.”

“Like any major economy, India will take all necessary measures to safeguard its national interests and economic security.”

Trump has long seen tariffs as a tool to right trade deficits and as a bargaining tool. He has also started to use it as a punitive measure to retaliate against countries for taking actions he disagrees with.

SAO PAULO — President Trump has made clear who his new Latin America priority is: former Brazilian President Jair Bolsonaro, a personal and political ally.

In doing so, he has damaged one of the Western hemisphere’s most important and long-standing relationships, by levying 50% tariffs that begin to take effect Wednesday on the largest Latin America economy, sanctioning its main justice and bringing relations between the two countries to the lowest point in decades.

The White House has appeared to embrace a narrative pushed by Bolsonaro allies in the U.S., that the former Brazilian president’s prosecution for attempting to overturn his 2022 election loss is part of a “deliberate breakdown in the rule of law,” with the government engaging in “politically motivated intimidation” and committing “human rights abuses,” according to Trump’s statement announcing the tariffs.

The message was clear earlier, when Trump described Bolsonaro’s prosecution by Brazil’s Supreme Court as a “witch hunt” — using the same phrase he has employed for the numerous investigations he has faced since his first term. Bolsonaro faces charges of orchestrating a coup attempt to stay in power after losing the 2022 election to President Luiz Inácio Lula da Silva. A conviction could come in the next few months.

The U.S. has a long history of meddling with the affairs of Latin American governments, but Trump’s latest moves are unprecedented, said Steven Levitsky, a political scientist at Harvard University.

“This is a personalistic government that is adopting policies according to Trump’s whims,” Levitsky said.

Bolsonaro’s sons, he noted, have close connections to Trump’s inner circle. The argument has been bolstered by parallels between Bolsonaro’s prosecution and the attempted prosecution of Trump for trying to overturn his 2020 election loss, which ended when he won his second term last November.

“He’s been convinced Bolsonaro is a kindred spirit suffering a similar witch hunt,” Levitsky said.

Brazil’s institutions hold firm against political pressure

After Bolsonaro’s defeat in 2022, Trump and his supporters echoed his baseless election fraud claims, treating him as a conservative icon and hosting him at the Conservative Political Action Conference. Steve Bannon, the former Trump adviser, recently told Brazil’s news website UOL that the U.S. would lift tariffs if Bolsonaro’s prosecution were dropped.

Meeting that demand, however, is impossible for several reasons.

Brazilian officials have consistently emphasized that the judiciary is independent. The executive branch, which manages foreign relations, has no control over Supreme Court justices, who in turn have stated they won’t yield to political pressure.

On Monday, the court ordered that Bolsonaro be placed under house arrest for violating court orders by spreading messages on social media through his sons’ accounts.

Justice Alexandre de Moraes, who oversees the case against Bolsonaro, was sanctioned under the U.S. Magnitsky Act, which is supposed to target serious human rights offenders. De Moraes has argued that defendants were granted full due process and said he would ignore the sanctions and continue his work.

“The ask for Lula was undoable,” said Bruna Santos of the Inter-American Dialogue in Washington, D.C., about dropping the charges against Bolsonaro. “In the long run, you are leaving a scar on the relationship between the two largest democracies in the hemisphere.”

Magnitsky sanctions ‘twist the law’

Three key factors explain the souring of U.S.-Brazil ties in recent months, said Oliver Stuenkel, a senior fellow at the Carnegie Endowment for International Peace: growing alignment between the far-right in both countries; Brazil’s refusal to cave to tariff threats; and the country’s lack of lobbying in Washington.

Lawmaker Eduardo Bolsonaro, Jair Bolsonaro’s third son, has been a central figure linking Brazil’s far-right with Trump’s MAGA movement.

He took a leave from Brazil’s Congress and moved to the U.S. in March, but he has long cultivated ties in Trump’s orbit. Eduardo openly called for Magnitsky sanctions against de Moraes and publicly thanked Trump after the 50% tariffs were announced in early July.

Democratic Massachusetts Rep. Jim McGovern, author of the Magnitsky Act, which allows the U.S. to sanction individual foreign officials who violate human rights, called the administration’s actions “horrible.”

“They make things up to protect someone who says nice things about Donald Trump,” McGovern told The Associated Press.

Bolsonaro’s son helps connect far right in U.S. and Brazil

Eduardo Bolsonaro’s international campaign began immediately after his father’s 2022 loss. Just days after the elections, he met with Trump at his Mar-a-Lago estate in Florida.

As investigations against Bolsonaro and his allies deepened, the Brazilian far right adopted a narrative of judicial persecution and censorship, an echo of Trump and his allies who have claimed the U.S. justice system was weaponized against him.

Brazil’s Supreme Court and Electoral Court are among the world’s strictest regulators of online discourse: they can order social media takedowns and arrests for spreading misinformation or other content it rules “anti-democratic.”

But until recently, few believed Eduardo’s efforts to punish Brazil’s justices would succeed.

That began to change last year when billionaire Elon Musk clashed with de Moraes over censorship on X and threatened to defy court orders by pulling its legal representative from Brazil. In response, de Moraes suspended the social media platform from operating in the country for a month and threatened operations of another Musk company, Starlink. In the end, Musk blinked.

Fábio de Sá e Silva, a professor of international and Brazilian studies at the University of Oklahoma, said Eduardo’s influence became evident in May 2024, when he and other right-wing allies secured a hearing before the U.S. House Foreign Affairs Committee.

“It revealed clear coordination between Bolsonaro supporters and sectors of the U.S. Republican Party,” he said. “It’s a strategy to pressure Brazilian democracy from the outside.”

A last-minute tariff push yields some wins

Brazil has a diplomatic tradition of maintaining a low-key presence in Washington, Stuenkel said. That vacuum created an opportunity for Eduardo Bolsonaro to promote a distorted narrative about Brazil among Republicans and those closest to Trump.

“Now Brazil is paying the price,” he said.

After Trump announced sweeping tariffs in April, Brazil began negotiations. President Lula and Vice President Geraldo Alckmin — Brazil’s lead trade negotiator — said they have held numerous meetings with U.S. trade officials since then.

Lula and Trump have never spoken, and the Brazilian president has repeatedly said Washington ignored Brazil’s efforts to negotiate ahead of the tariffs’ implementation.

Privately, diplomats say they felt the decisions were made inside the White House, within Trump’s inner circle — a group they had no access to.

A delegation of Brazilian senators traveled to Washington in the final week of July in a last-ditch effort to defuse tensions. The group, led by Senator Nelsinho Trad, met with business leaders with ties to Brazil and nine U.S. senators — only one of them Republican, Thom Tillis of North Carolina.

“We found views on Brazil were ideologically charged,” Trad told The AP. “But we made an effort to present economic arguments.”

While the delegation was in Washington, Trump signed the order imposing the 50% tariff. But there was relief: not all Brazilian imports would be hit. Exemptions included civil aircraft and parts, aluminum, tin, wood pulp, energy products and fertilizers.

Trad believes Brazil’s outreach may have helped soften the final terms.

“I think the path has to remain one of dialogue and reason so we can make progress on other fronts,” he said.

Pessoa and Riccardi write for the Associated Press. AP writer Mauricio Savarese in Sao Paulo contributed to this report.

GENEVA — Switzerland’s president and other top officials were traveling to Washington on Tuesday in a hastily arranged trip aimed at striking a deal with the Trump administration over steep U.S. tariffs that have cast a pall over Swiss industries like chocolates, machinery and watchmaking.

President Karin Keller-Sutter was leading the delegation after last week’s announcement that exports of Swiss goods to the U.S. will face a whopping 39% percent tariff starting Thursday.

That is over two-and-a-half times higher than the rate on European Union goods exported to the U.S. and nearly four times higher than on British exports to the U.S. Many Swiss companies in industries including watchmaking and chocolates have expressed concern about the issue.

It’s also more than the 31% that Switzerland had been set to face when President Trump announced his “Liberation Day” tariffs on products from dozens of countries in early April.

The Swiss government said the trip was “to facilitate meetings with the U.S. authorities at short notice and hold talks with a view to improving the tariff situation for Switzerland.”

Keller-Sutter, who also serves as Switzerland’s finance minister, has faced criticism in Swiss media over a last-ditch call with Trump before a U.S. deadline on tariffs expired Aug. 1. She was leading a team that included Economy Minister Guy Parmelin.

In an interview with CNBC on Tuesday, Trump alluded to the call, saying “the woman was nice, but she didn’t want to listen” and that he had told her: “We have a $41 billion deficit with you, Madame … and you want to pay 1% tariffs.”

“I said, ‘you’re not going to pay 1%,’” he added.

It was not immediately clear where that $41 billion figure came from. According to the U.S. Census Bureau, the United States ran a $38.3 billion trade imbalance on goods last year with Switzerland.

Swiss officials have argued that American goods face virtually zero tariffs in Switzerland, and the Swiss government says the wealthy Alpine country is the sixth-biggest foreign investor in the United States and the leading investor in research and development.

Ivan Slatkine, the head of the Federation of Romandie Enterprises, which regroups companies in French-speaking Switzerland, told Le Temps newspaper that 39% tariffs amounted to a “hammer blow for the entire Swiss economy.” Some Swiss companies — like high-end watchmakers with little direct competition — might face less impact, but others in airplane parts, machines and mid-level watchmaking would be hit, he said.

“For all the companies that depend on the American market, it’s really bad news — in particular compared to rivals in the European Union, whose exports are taxed only at 15%,” he was quoted Tuesday as saying.

The trip comes a day after Switzerland’s executive branch, the Federal Council, held an extraordinary meeting and said it was “keen to pursue talks with the United States on the tariff situation,” the government statement Tuesday said.

After consulting with Swiss businesses, the council said it had developed “new approaches for its discussions” with U.S. officials and was looking ahead to continued negotiations.

“Switzerland enters this new phase ready to present a more attractive offer, taking U.S. concerns into account and seeking to ease the current tariff situation,” a council statement said Monday.

Under the U.S. announcements Friday, Swiss companies will now have one of the steepest export duties — only Laos, Myanmar and Syria had higher figures, at 40-41%.

Keaten writes for the Associated Press.