tariff

Details about the agreement, which US President Donald Trump announced on Truth Social, are limited

United States President Donald Trump said he has reached a trade deal with the Philippines, charging it 19 percent tariff rate for goods it exports to the US, while US goods will pay zero tariffs.

The president announced the new agreement on Tuesday on his social media platform Truth Social shortly after his meeting with President Ferdinand Marcos Jr at the White House.

“We concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States,” Trump said on his Truth Social platform after welcoming Marcos to the White House.

The 19 percent tariff rate was just below the 20 percent threatened by Trump earlier this month, but above the 17 percent rate set in April when Trump announced what he called reciprocal tariff rates for dozens of countries. It matches the 19 percent rate announced for Indonesia and bests Vietnam’s slightly higher rate of 20 percent.

The US had a deficit of nearly $5bn with the Philippines last year on bilateral goods trade of $23.5bn.

Marcos, the first Southeast Asian leader to meet Trump in his second term, told reporters at the start of the meeting that the US was his country’s “strongest, closest, most reliable ally”.

Trump said the two Pacific allies would also work together militarily but gave no details.

Philippine Assistant Foreign Secretary Raquel Solano said last week that trade officials have been working with US counterparts seeking to seal a “mutually acceptable and mutually beneficial” deal.

Protesters gathered near the White House as Marcos arrived, demanding the Philippine leader address the pleas of Filipino Americans and migrant workers who have made multiple requests for support amid US immigration raids.

Trump underscored the importance of the US-Philippine military relationship, saying, “They’re a very important nation militarily, and we’ve had some great drills lately.”

Marcos, who arrived in Washington on Sunday, met with Defense Secretary Pete Hegseth and Secretary of State Marco Rubio on Monday. During his trip, he will also meet US business leaders investing in the Philippines. Philippine officials say Marcos planned to stress that Manila must become economically stronger if it is to serve as a truly robust partner to the US in the Asia Pacific region.

Looming pressure on China

During the Oval Office event, Trump said he may visit China for a landmark trip “in the not-too-distant future” and noted the Philippines had distanced itself from Beijing after his election last November.

“The country was maybe tilting toward China, but we un-tilted it very, very quickly,” Trump said.

The US president has sought to lower tensions with Beijing in recent weeks after pausing a tit-for-tat tariff war that has upended global trade and supply chains. US Treasury Secretary Scott Bessent said on Tuesday he would meet with Chinese officials in Sweden next week.

No comment was immediately available from Marcos, who did not speak to reporters before leaving the White House grounds.

When United States President Donald Trump unveiled his steep “reciprocal” tariffs on dozens of countries in April, economists issued warnings of catastrophic economic harm.

So far, their fears have not materialised.

The US economy – the single biggest driver of global growth – has defied expectations across numerous metrics, with inflation staying low, employment and consumer spending remaining robust, and the stock market reaching record highs.

Still, even if the limited fallout from Trump’s tariffs has taken some analysts by surprise, economists warn that the US and global economies may just be experiencing the calm before the storm.

Dozens of US trade partners, including close allies such as South Korea and Japan, are facing tariffs of 25 percent to 40 percent unless they seal trade deals with the Trump administration by an August 1 deadline.

“When you start to see tariffs at 20 or more, you reach a point where firms may stop importing altogether,” Joseph Foudy, an economics professor at the New York University Stern School of Business, told Al Jazeera.

“Firms simply postpone major decisions, delay hiring, and economic activity declines,” Foudy added.

“The uncertainty around trade in that sense is as costly as the actual tariff rates.”

Even countries that are able to hammer out a deal in time are likely to face significantly higher duties.

Trump’s preliminary agreements with Vietnam and China, announced in May and early July, respectively, stipulate minimum tariff rates of 20 percent and 30 percent.

On Friday, the Financial Times reported that Trump was pushing for a tariff of 15-20 percent on the European Union, which is the US’s single largest trading partner and is facing a 30 percent duty from August 1, in any deal reached with the bloc.

Ursula von der Leyen, the president of the European Commission, has warned that Trump’s mooted 30 percent tariff would “disrupt essential transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic”.

‘Harm growth’

“In my view, the few tariff agreements that have been reached represent nontrivial changes in US trade policy and so will harm growth, so even if much less extreme than threatened, will matter,” Steven Durlauf, a professor of economics at the University of Chicago, told Al Jazeera.

Economists widely agree that the impact of tariffs implemented so far has not been fully felt, as many businesses built up their stockpiles of inventories in advance to mitigate rising costs.

Under the existing measures – including a baseline 10 percent duty on nearly all countries, and higher levies on cars and steel – the effective average US tariff rate currently stands at 16.6 percent, with the rate set to rise 20.6 percent from August 1, according to The Budget Lab at Yale Department of Economics.

Even if Trump does not sharply hike tariffs on August 1, economists expect inflation to rise at least somewhat in the coming months, with higher prices in turn likely to drag on growth.

In an analysis published last month, BBVA Research estimated that even the current level of US tariffs could reduce global gross domestic product (GDP) by 0.5 of a percentage point in the short term, and by more than 2 percentage points over the medium term.

“It is too soon to expect big effects on prices in the US, as there was a large increase in exports to the US in anticipation of higher tariffs, and firms are waiting to see where things will end up in terms of tariffs that affect them. So, not surprising, we have seen limited effects so far,” Bernard Hoekman, director of Global Economics at the Robert Schuman Centre for Advanced Studies at the European University Institute in Florence, Italy, told Al Jazeera.

“But if the US does what it has indicated it wants to do – raise average tariffs to the 20-30 percent level – there will be a much larger impact.”

Trump and his allies have repeatedly dismissed economists’ warnings about his tariffs, pointing to the steady stream of positive data to make the case that the economic consensus is flawed.

“The Fake News and the so-called ‘Experts’ were wrong again,” Trump wrote on Truth Social in response to a recent report from his Council of Economic Advisers (CEA) that found prices of imported goods fell by 0.1 percent from December to May.

“Tariffs are making our Country ‘BOOM.’”

The CEA report’s methodology drew criticism from some economic analysts, with the National Taxpayers Union saying it failed to take account of stockpiling by importers and covered a period that was “way too short to draw any definitive conclusions”.

Despite the strong headline figures on the US economy, economists have also pointed to warning signs in the data.

In a note last week, Wells Fargo economists Tim Quinlan and Shannon Grein pointed out that discretionary spending on services in the US fell 0.3 percent in the year up to May, indicating potential economic storm clouds ahead.

“That is admittedly a modest decline, but what makes it scary is that in 60+ years, this measure has only declined either during or immediately after recessions,” Quinlan and Grein said.

Durlauf, the University of Chicago professor, said the Trump administration had little cause to see the relative health of the economy up until now as a vindication of its economic plans.

“First, there is widespread belief that tariff threats will not be realised in actual agreements. Second, the effects of tariffs on prices and output take some time to work through the system,” Durlauf said.

“There is no sense that the absence of large effects on real activity and inflation, so far, in any way vindicate claims of the Trump administration.”

Seoul, South Korea – When Sideny Sim had a chance to visit the United States on business several years ago, it was the fulfilment of a lifelong dream.

Like many South Koreans, Sim had long admired the US as a cultural juggernaut and positive force in the world.

These days, Sim, a 38-year-old engineer living near Seoul, feels no such love towards the country.

As US President Donald Trump threatens to impose a 25 percent tariff on South Korea from August 1, Sim cannot help but feel betrayed.

“If they used to be a country that was known to be a leader in culture, the economy and the perception of being ‘good,’ I feel like the US is now a threat to geopolitical balance,” Sim told Al Jazeera.

South Korea and the US share deep and enduring ties.

South Korea is one of Washington’s closest allies in Asia, hosting about 28,000 US troops as a bulwark against North Korea.

The US is home to a larger South Korean diaspora than any other country.

But with the return of Trump’s “America First” agenda to Washington, DC, those ties are coming under strain.

In a Pew Research Center survey released earlier this month, 61 percent of South Koreans expressed a favourable view of the US, down from 77 percent in 2024.

Like dozens of other US trading partners, South Korea is facing severe economic disruption if it cannot reach a trade deal with the Trump administration by the August deadline.

The Asian country, which is a major producer of electronics, ships and cars, generates more than 40 percent of its gross domestic product (GDP) from exports.

In addition to sending a letter to South Korean President Lee Jae-Myung outlining his tariff threats, Trump earlier this month also claimed that Seoul pays “very little” to support the presence of US Forces Korea (USFK).

Trump’s comments reinforced speculation that he could demand that the South Korean government increase its national defence spending or contributions to the costs of the USFK.

After Trump last week told reporters that South Korea “wants to make a deal right now,” Seoul’s top trade envoy said that an “in-principle” agreement was possible by the deadline.

With the clock ticking on a deal, the uncertainty created by Trump’s trade policies has stirred resentment among many South Koreans.

Kim Hyunju, a customer service agent working in Seoul, said that although her company would not be directly affected by the tariffs, Trump’s trade salvoes did not seem fair.

“It would only be fair if they are OK with us raising our tariffs to the same level as well,” Kim told Al Jazeera, adding that the Trump administration’s actions had caused her to feel animosity towards the US.

“I can’t help but see the US as a powerful nation which fulfils its interests with money and sheer power plays,” Kim said.

“I’ve always thought of the US as a friendly ally that is special to us, especially in terms of national defence. I know it is good for us to maintain this friendly status, but I sort of lost faith when Trump also demanded a larger amount of money for the US military presence in our country.”

Kim Chang-chul, an investment strategist in Seoul, expressed a more sanguine view of Trump’s trade policies, even while acknowledging the harm they could do to South Korean businesses.

“The US tariff policy is a burden for our government and businesses, but the move really shows the depth of US decision-making and strategy,” Kim told Al Jazeera.

“Trump wants South Korea to be more involved in the US’s energy ambitions in Alaska. It’s part of the US pushing for geopolitical realignment and economic rebalancing.”

Earlier this year, the US held talks with South Korean officials about boosting US exports of liquefied natural gas (LNG) to South Korea, a major LNG importer.

Keum Hye-yoon, a researcher at the Korea Institute for International Economic Policy (KIEP), said it has been difficult for a US ally like South Korea to make sense of Trump’s comments and actions.

“When Trump cites ‘fairness’ in his tariff policy, it’s based on unilateral expectations of improving the US trade balance or restoring economic strength to certain industries,” Keum told Al Jazeera.

“As allies like South Korea share supply chains with the US and work closely with its companies, disregarding these structures and imposing high taxes will likely create burdens on US businesses and consumers as well.”

While Trump’s most severe tariffs have yet to come into effect, South Korean manufacturers have already reported some disruption.

South Korea’s exports dropped 2.2 percent in the first 20 days of July compared with a year earlier, according to preliminary data released by Korea Customs Service on Monday.

Kim Sung-hyeok, the head of research at the Korean Confederation of Trade Unions (KCTU) Labour Institute, said exporters in the auto, steel, semiconductor and pharmaceutical sectors had been especially affected.

“As exports in these fields decreased considerably since the tariff announcements, production orders in domestic factories have declined,” Kim told Al Jazeera.

“Some automotive and steel production lines have closed temporarily, while other manufacturing sites have closed altogether. Voluntary resignations and redeployments have become rampant in some of these workplaces.”

Kim said small companies may face the brunt of the tariffs as they are not capable of “moving their manufacturing plants to the US”, or “diversifying their trade avenues outside of the US”.

“And as major companies face a general decline in exports, these small companies will consequently face a shortage in product delivery volume that will cause employment disputes,” he said.

The Korea Development Institute estimated in May that the number of employed South Koreans would increase by just 90,000 this year, in part due to the economic uncertainties, compared with a rise of 160,000 last year.

Even before Trump’s arrival on the political scene, US-South Korea relations had gone through difficult periods in the past.

In 2002, two South Korean middle-school girls were killed when they were struck by a US Army armoured vehicle.

After the American soldiers involved in the incident were found not guilty of negligent homicide by a US military court, the country saw an explosion in anti-US sentiment and nationwide protests.

In 2008, nationwide protests took place after the South Korean government decided to continue importing US beef despite concerns about the risk of Mad Cow Disease.

More recently, President Lee, who was elected in June, has emphasised the importance of maintaining positive relations with China, Washington’s biggest strategic rival and competitor.

The KIEP’s Keum said the US-South Korea relationship has evolved into a partnership where the US has become a “conditional ally”, where “economic interests take precedence over traditional alliance”.

“The US is increasingly demanding South Korea to cooperate in its containment strategy of China among its other socioeconomic policies,” she said.

Keum said that South Korea will need to seek out alternative markets and diversify its exports to mitigate the fallout of Trump’s agenda.

“South Korea also doesn’t need to act alone. The country can seek joint action with countries such as EU members, Japan and Canada to come up with joint responses to the current predicament,” she said.

WASHINGTON — When President Trump returned to the White House in January, he promised to deliver big foreign policy wins in record time.

He said he would halt Russia’s war against Ukraine in 24 hours or less, end Israel’s war in Gaza nearly as quickly and force Iran to end to its nuclear program. He said he’d persuade Canada to become the 51st state, take Greenland from Denmark and negotiate 90 trade deals in 90 days.

“The president believes that his force of personality … can bend people to do things,” his special envoy-for-everything, Steve Witkoff, explained in May in a Breitbart interview.

Six months later, none of those ambitious goals have been reached.

Ukraine and Gaza are still at war. Israel and the United States bombed Iran’s nuclear facilities, but it’s not clear whether they ended the country’s atomic program once and for all. Canada and Denmark haven’t surrendered any territory. And instead of trade deals, Trump is mostly slapping tariffs on other countries, to the distress of U.S. stock markets.

It turned out that force of personality couldn’t solve every problem.

“He overestimated his power and underestimated the ability of others to push back,” said Kori Schake, director of foreign policy at the conservative American Enterprise Institute. “He often acts as if we’re the only people with leverage, strength or the ability to take action. We’re not.”

The president has notched important achievements. He won a commitment from other members of NATO to increase their defense spending to 5% of gross domestic product. The attack on Iran appears to have set Tehran’s nuclear project back for years, even if it didn’t end it. And Trump — or more precisely, his aides — helped broker ceasefires between India and Pakistan and between Rwanda and the Democratic Republic of Congo.

But none of those measured up to the goals Trump initially set for himself — much less qualified for the Nobel Peace Prize he has publicly yearned for. “I won’t get a Nobel Peace Prize for this,” he grumbled when the Rwanda-Congo agreement was signed.

The most striking example of unfulfilled expectations has come in Ukraine, the grinding conflict Trump claimed he could end even before his inauguration.

For months, Trump sounded certain that his warm relationship with Russian President Vladimir Putin would produce a deal that would stop the fighting, award Russia most of the territory its troops have seized and end U.S. economic sanctions on Moscow.

“I believe he wants peace,” Trump said of Putin in February. “I trust him on this subject.”

But to Trump’s surprise, Putin wasn’t satisfied with his proposal. The Russian leader continued bombing Ukrainian cities even after Trump publicly implored him to halt via social media (“Vladimir, STOP!”).

Critics charged that Putin was playing Trump for a fool. The president bristled: “Nobody’s playing me.”

But as early as April, he admitted to doubts about Putin’s good faith. “It makes me think that maybe he doesn’t want to stop the war, he’s just tapping me along,” he said.

“I speak to him a lot about getting this thing done, and I always hang up and say, ‘Well, that was a nice phone call,’ and then missiles are launched into Kyiv or some other city,” Trump complained last week. “After that happens three or four times, you say the talk doesn’t mean anything.”

The president also came under pressure from Republican hawks in Congress who warned privately that if Ukraine collapsed, Trump would be blamed the way his predecessor, President Biden, was blamed for the fall of Afghanistan in 2022.

So last week, Trump changed course and announced that he will resume supplying U.S.-made missiles to Ukraine — but by selling them to European countries instead of giving them to Kyiv as Biden had.

Trump also gave Putin 50 days to accept a ceasefire and threatened to impose “secondary tariffs” on countries that buy oil from Russia if he does not comply.

He said he still hopes Putin will come around. “I’m not done with him, but I’m disappointed in him,” he said in a BBC interview.

It still isn’t clear how many missiles Ukraine will get and whether they will include long-range weapons that can strike targets deep inside Russia. A White House official said those details are still being worked out.

Russian Foreign Minister Sergei Lavrov sounded unimpressed by the U.S. actions. “I have no doubt that we will cope,” he said.

Foreign policy experts warned that the secondary tariffs Trump proposed could prove impractical. Russia’s two biggest oil customers are China and India; Trump is trying to negotiate major trade agreements with both.

Meanwhile, Trump has dispatched Witkoff back to the Middle East to try to arrange a ceasefire in Gaza and reopen nuclear talks with Iran — the goals he began with six months ago.

Despite his mercurial style, Trump’s approach to all these foreign crises reflects basic premises that have remained constant for a decade, foreign policy experts said.

“There is a Trump Doctrine, and it has three basic principles,” Schake said. “Alliances are a burden. Trade exports American jobs. Immigrants steal American jobs.”

Robert Kagan, a former Republican aide now at the Brookings Institution, added one more guiding principle: “He favors autocrats over democrats.” Trump has a soft spot for foreign strongmen like Putin and China’s Xi Jinping, and has abandoned the long-standing U.S. policy of fostering democracy abroad, Kagan noted.

The problem, Schake said, is that those principles “impede Trump’s ability to get things done around the world, and he doesn’t seem to realize it.

“The international order we built after World War II made American power stronger and more effective,” she said. “Trump and his administration seem bent on presiding over the destruction of that international order.”

Moreover, Kagan argued, Trump’s frenetic imposition of punitive tariffs on other countries comes with serious costs.

“Tariffs are a form of economic warfare,” he said. “Trump is creating enemies for the United States all over the world. … I don’t think you can have a successful foreign policy if everyone in the world mistrusts you.”

Not surprisingly, Trump and his aides don’t agree.

“It cannot be overstated how successful the first six months of this administration have been,” White House Press Secretary Karoline Leavitt said last week. “With President Trump as commander in chief, the world is a much safer place.”

That claim will take years to test.

Brazilian president says that Donald Trump was elected to lead the US, not to be ‘the emperor of the world’.

Brazilian President Luiz Inacio Lula da Silva has said that his country will not take instructions from the United States after US President Donald Trump threatened Brazil with 50 percent tariffs and called for an end to the trial of right-wing ally Jair Bolsonaro.

In an interview with CNN on Thursday, President Lula said that the tariffs have no “logic” but that he does not believe there is a “crisis” in relations between the US and his country as of yet.

“For me, it was a surprise, not only the value of that tariff, but also how it was announced, the way it was announced,” Lula said. “We cannot have President Trump forgetting that he was elected to govern the US, not to be the emperor of the world.”

The US president’s heavy-handed approach to economic relations with other countries has chafed foreign leaders such as Lula, who has expressed frustration at what he sees as Trump’s efforts to dictate terms to Brazil on matters of trade and domestic judicial proceedings.

Bolsonaro, the former president of Brazil who has close ties with Trump and his family, is currently on trial for alleged efforts to mount a coup and reverse Lula’s victory over him in the 2022 election.

Trump, who also faced legal trouble stemming from his efforts to remain in office after losing an election, has called the trial a “witch hunt” and demanded that it come to an end. He has recently done the same for another right-wing ally, Israeli Prime Minister Benjamin Netanyahu.

“The judiciary branch of power in Brazil is independent. The president of the republic has no influence whatsoever,” Lula said, stating that Bolsonaro “is not being judged personally”, but “being judged by the acts he tried to organise a coup d’etat”.

The US has also warned Brazil that it will be penalised with higher tariffs if it continues its work as a leading member of BRICS, a coalition of developing economies that have sought to promote alternatives to the US-backed global financial system.

Trump has attacked the group for “anti-Western priorities” and threatened higher tariffs for any countries involved with the bloc.

In Latin America, where the US has a long history of heavy-handed involvement in the domestic affairs of various nations, Trump’s threats and blunt use of US economic leverage have sparked anger.

“Brazil is to take care of Brazil and take care of the Brazilian people, and to take not to take care of the interests of the others,” Lula said.

“Brazil will not accept anything imposed on it. We accept negotiation and not imposition.”

United States President Donald Trump threatened to impose “very severe tariffs” on Russia on Monday if a peace agreement to end the Ukraine war is not reached in the next 50 days.

Trump has also unveiled a new agreement to supply Ukraine with more weapons.

On the campaign trail ahead of last year’s presidential election, Trump boasted that he would end the war in Ukraine within his first 24 hours in office.

However, after at least six phone conversations between Trump and his Russian counterpart, President Vladimir Putin, as well as several meetings between US officials and officials from Russia and Ukraine, no ceasefire deal has been reached.

In May, Putin refused to travel to Istanbul to meet with Ukrainian President Volodymyr Zelenskyy for peace talks. The two countries sent delegations instead, resulting in prisoner exchange agreements, only.

So, will Trump’s latest threat convince Russian President Vladimir Putin to change his stance on Ukraine?

What did Trump say about Russia and Ukraine this week?

Weapons for Ukraine

At a meeting with NATO Secretary-General Mark Rutte in the Oval Office on Monday, Trump said he was “disappointed” in Putin and that Ukraine would receive billions of dollars’ worth of US weapons.

“We’re going to make top-of-the-line weapons, and they’ll be sent to NATO,” Trump said, adding that NATO would pay for them. He added that this would include the Patriot air defence missiles that Ukraine has sought urgently.

“We have one country that has 17 Patriots getting ready to be shipped … We’re going to work a deal where the 17 will go, or a big portion of the 17 will go to the war site,” Trump said.

New tariffs for Russian goods

Trump said if Putin fails to sign a peace deal with Ukraine within 50 days of Monday this week, he will impose “very severe” trade tariffs on Russia, as well as secondary tariffs on other countries.

“We’re going to be doing secondary tariffs,” Trump said. “If we don’t have a deal in 50 days, it’s very simple, and they’ll be at 100 percent.”

Since the start of the Ukraine war, the US and its allies have imposed at least 21,692 separate sanctions on Russian individuals, media organisations and institutions, targeting sectors including the military, energy, aviation, shipbuilding and telecommunications.

While the trade relationship between US and Russia might be relatively marginal, “secondary tariffs” – first threatened by Trump in March but not implemented – would affect countries such as India and China purchasing Russian oil.

In 2024, Russian oil made up 35 percent of India’s total crude imports and 19 percent of China’s oil imports. Turkiye also relies heavily on Russian oil, sourcing up to 58 percent of its refined petroleum imports from Russia in 2023.

Some Western countries could also be hit by secondary tariffs. In 2024, European countries spent more than $700m on Russian uranium products, according to an analysis by the Brussels-based think tank Bruegel, which used data from the European Union’s statistical office, Eurostat.

How has Russia responded to Trump’s latest threats?

Putin has not responded personally.

However, Kremlin spokesperson Dmitry Peskov told reporters on Tuesday: “The US president’s statements are very serious. Some of them are addressed personally to President Putin. We certainly need time to analyse what was said in Washington.”

Peskov stated, however, that decisions made in Washington and other NATO countries were “perceived by the Ukrainian side not as a signal for peace, but as a signal to continue the war”.

Dmitry Medvedev, former Russian president and current deputy chair of Russia’s Security Council, wrote in an X post on Tuesday that Russia did not care about Trump’s “theatrical ultimatum”.

Trump issued a theatrical ultimatum to the Kremlin.
The world shuddered, expecting the consequences.
Belligerent Europe was disappointed.
Russia didn’t care.

— Dmitry Medvedev (@MedvedevRussiaE) July 15, 2025

Sergei Ryabkov, a senior Russian diplomat, said on Tuesday: “We first and foremost note that any attempts to make demands – especially ultimatums – are unacceptable for us,” Russia’s TASS news agency reported.

The Russian stock market appeared untroubled by Trump’s threat, rising 2.7 percent on Monday, according to the Moscow Stock Exchange.

The Russian rouble initially lost value against the US dollar but then recovered after Trump threatened new tariffs on Russia. According to data from financial analysis group LSEG, the rouble was just 0.2 percent weaker at the end of the day, trading at 78.10 to the US dollar after weakening to 78.75 earlier in the day.

The rouble gained 0.9 percent to 10.87 against the Chinese yuan, the most traded foreign currency in Russia. This was after it had weakened by more than 1 percent on Friday.

Will US weapons help Ukraine significantly?

Marina Miron, a postdoctoral researcher at the defence studies department at King’s College London, told Al Jazeera that the Patriot missile systems that Trump has pledged to sell to Ukraine are long-range air defences best suited for shooting down ballistic missiles such as Russia’s Iskander M.

“But Ukraine will need short- to medium-range systems as well as multiple rocket launchers in order to defend itself. So it’s more of a political move for Trump rather than anything else,” Miron said.

She added that the significance of these weapons depends on several factors, including whether Ukraine will get 17 systems as allegedly promised, and where the systems would be placed.

How has Trump changed his stance on aiding Ukraine?

A month into his presidential term, Trump posted on his Truth Social platform, blaming Zelenskyy for continuing the war with Russia and saying the Ukrainian president “talked the United States of America into spending $350 Billion Dollars, to go into a War that couldn’t be won, that never had to start”.

The US has sent Ukraine about $134bn in aid so far – not $350bn – according to the Kiel Institute for the World Economy.

Trump’s MAGA (Make America Great Again) base has also been critical of US funding for Ukraine.

In early July, the Trump administration announced a decision to “pause” arms deliveries to Kyiv, but reversed this a week later. When Trump announced the reversal on July 8, his supporters voiced criticism.

Derrick Evans, one of Trump’s supporters who was among the throng which stormed the US Capitol on January 6, 2021, and who was later arrested but then pardoned by Trump in January this year, wrote on X: “I did not vote for this.” Conservative social media duo Keith and Kevin Hodge posted on X: “Who in the hell is telling Trump that we need to send more weapons to Ukraine?”

Trump appears to be attempting to address these criticisms by saying that instead of supplying weapons to Ukraine, he will sell them to NATO.

Furthermore, Miron said, the US is not losing anything by selling weapons, since NATO will be paying for them. “There are not enough systems being provided to make a substantial difference,” she said.

Could Trump’s latest threats force Putin to change his policy?

While Putin has repeatedly voiced his determination to achieve his war aims, he has not specifically stated what they are. Broadly, he has sought territorial gains within Ukraine and has opposed Ukraine’s membership in NATO – these have not changed and are unlikely to do so, according to observers.

“If you were to describe Russia’s approach, it’s ‘keep calm and carry on,’” Miron said, referring to the fact that most Russian officials have not responded to Trump’s threat.

“So they are not going for this informational trap,” she said.

Has Putin changed his stance at all since Russia invaded Ukraine?

Miron said Putin has expanded his goals since Ukraine’s major cross-border incursion to the Kursk region in August last year. Ukraine’s push into Kursk, which took the Kremlin by surprise, marked the most significant Ukrainian attack inside Russian territory since the war began.

In May this year, Russian troops were tasked with establishing a buffer zone stretching up to 10km (6 miles) into Ukraine’s Dnipropetrovsk Oblast, according to Ukraine’s military intelligence chief Kyrylo Budanov, in an interview with Bloomberg published on July 11.

“I have already said that a decision was made to create the necessary security buffer zone along the border. Our armed forces are currently solving this problem. Enemy firing points are being actively suppressed, the work is under way,” Putin said back then.

While Putin did not provide much detail about what the buffer zones would entail, Russian General Viktor Sobolev said they would allow Russia to push Ukraine’s long-range missiles out of striking range, Ukrainian media reported.

The new deal comes as the Southeast Asian country plans to buy 50 Boeing jets, according to US President Donald Trump.

The United States has struck a trade deal with Indonesia resulting in significant purchase commitments from the Southeast Asian country, following negotiations to avoid steeper US tariffs.

US President Donald Trump announced the new deal on Tuesday.

The agreement imposes a 19 percent tariff on Indonesian goods entering the US, Trump said in a post on his Truth Social platform.

Under the deal, which was finalised after Trump spoke with Indonesian President Prabowo Subianto, goods that have been transshipped to avoid higher duties will face steeper levies.

“As part of the Agreement, Indonesia has committed to purchasing $15 Billion Dollars in US Energy, $4.5 Billion Dollars in American Agricultural Products, and 50 Boeing Jets, many of them 777’s,” Trump wrote.

In a separate post earlier on Tuesday, Trump touted the finalised pact as a “great deal, for everybody”.

Boeing stock remained relatively flat on the announcement.

Last week, Trump renewed his threat of a 32 percent levy on Indonesian goods, saying in a letter to the country’s leadership that this level would take effect August 1.

It remains unclear when the lower tariff level announced Tuesday will take effect for Indonesia. The period over which its various purchases will take place was also not specified.

Lagging on trade agreements

The Trump administration has been under pressure to wrap up trade pacts after promising a flurry of deals recently, as countries sought talks with Washington, DC to avoid Trump’s tariff plans.

When Trump first postponed tariffs on April 2, the White House said it would have 90 deals in 90 days. But the US president has so far only unveiled other deals with Britain and Vietnam, alongside an agreement to temporarily lower tit-for-tat levies with China.

He separately told reporters that other deals are in the works including with India, while talks with the European Union are continuing.

Indonesia’s former Vice Minister for Foreign Affairs Dino Patti Djalal told a Foreign Policy magazine event on Tuesday that government insiders had indicated they were happy with the new deal.

Trump in April imposed a 10 percent tariff on almost all trading partners, while announcing plans to eventually hike this level for dozens of economies, including the EU and Indonesia.

Last week, days before the steeper duties were due to take effect, he pushed the deadline back from July 9 to August 1. This marked his second postponement of the elevated levies.

Instead, since early last week, Trump has been sending letters to partners, setting out the tariff levels they would face come August.

So far, he has sent more than 20 such letters, including to the EU, Japan, South Korea and Malaysia. Canada and Mexico, both countries that were not originally targeted in Trump’s “reciprocal” tariff push in April, also received similar documents outlining updated tariffs for their products.

When a country like Armenia sends a film out into the world, it’s not just art. It’s a way to preserve memory, to reach a scattered diaspora. Each film offers the world stories that might otherwise be forgotten. So when President Trump proposes a 100% tariff on all films “produced in foreign lands,” the damage isn’t limited to foreign competitors or outsourcing studios. It threatens to shut out small nations like Armenia, for whom cinema is a lifeline.

The proposal hasn’t taken effect — yet. But July 9 marked a turning point in Trump’s broader tariff agenda, with a deadline for reimposing sweeping trade penalties on countries deemed “unfair.” While the situation for films remains unclear, the proposal alone has done damage and continues to haunt the industry. The tariff idea arises from the worldview that treats international exchange as a threat — and cultural expression as just another import to tax.

Take “Amerikatsi” (2022), the extraordinary recent movie by Emmy-winning actor and director Michael A. Goorjian. Inspired by his grandfather’s escape from the Armenian genocide — smuggled across the ocean in a crate — the project is not just a movie; it’s a universal story rooted in the Armenian experience, made possible by international collaboration and driven by a deep personal mission. Goorjian filmed it in Armenia with local crews, including people who, months later, would find themselves on the front lines of war. One was killed. Others were injured. Still, they sent him videos from the trenches saying all they wanted was to return to the set. That is the spirit a tariff like this would crush.

Armenia is a democracy in a dangerous neighborhood. Its history is riddled with trauma — genocide, war, occupation — and its present is haunted by threats from neighboring authoritarian regimes. But even as bombs fall and borders close, its people create. Films like “Aurora’s Sunrise” (2022) and “Should the Wind Drop” (2020) carry voices across oceans, turning pain into poetry, history into cinema. These films don’t rely on wide releases. They depend on arthouses, festivals, streamers and distributors with the courage and curiosity to take a chance. A 100% tariff would devastate that.

Indeed, the ripple effects of such a tariff would upend the entire global film ecosystem. Modern cinema is inherently international: A Georgian director might work with a French editor, an American actor and a German financier.

So sure, many American films use crew and facilities in Canada. But international co-productions are a growing cornerstone of the global film industry, particularly in Europe. Belgium produces up to 72% of its films in partnership with foreign nations, often France. Other notable co-production leaders include Luxembourg (45% with France), Slovakia (38% with Czechia) and Switzerland (31% with France). These partnerships are often driven by shared language, which is why the U.S. is also frequently involved in co-productions with Britain as well as Canada. Israel too has leaned into this model, using agreements with countries such as France, Germany and Canada to gain access to international audiences and funding mechanisms.

The U.S. government cannot unmake this system and should not try to do so. To penalize “foreign-made” films is to punish Americans too — artists, producers and distributors who thrive on collaboration. You can’t build a wall around storytelling.

Supporters of the tariff argue it protects American workers. But Hollywood is already one of the most globalized industries on Earth, and the idea that it suffers from too many foreign films is absurd. If anything, it suffers from too few. The result of this policy won’t be a thriving domestic market — but a quieter, flatter, more parochial one. A landscape where the next “Amerikatsi” never gets seen, where a generation of Armenian American youth never discovers their history through a movie screen.

If America still wants to lead in the 21st century — not just militarily and economically but morally — it should lead through culture and avoid isolation.

Stories like “Amerikatsi” remind us why that matters. A film that begins with a boy smuggled in a crate across the ocean ends with a message of joy and resilience. That’s not just Armenian history — it’s American history too. It cannot be separated. Unless we want that kind of storytelling priced out of our cinemas (and off our streaming platforms), we must keep the doors open.

For America to turn its back on stories like these would be a betrayal of everything film can be. And it would impoverish American society too. That way lies not greatness but provinciality.

Alexis Alexanian is a New York City-based film producer, consultant and educator whose credits include “A League of Their Own” and “Pieces of April.” She is a past president of New York Women in Film & Television and sits on the board of BAFTA North America.

Published on
14/07/2025 – 10:22 GMT+2

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Investors in Europe reeled from US President Donald Trump’s tariff threats on Monday morning, sending the major indexes into negative territory.

As of around 9.30am CEST, France’s CAC 40 was down 0.52% at 7,788.23, the UK’s FTSE 100 slipped 0.38% to 8,941.12, and Germany’s DAX dropped 0.85% to 24,049.73.

Spain’s IBEX 35 fell 0.80% to 13,897.80, while Italy’s FTSE MIB dropped 0.86% to 39,726.27.

The STOXX 600 slid 0.48% to 544.73 and the STOXX 50 fell 0.83% to 5,338.57.

The movements come as EU trade ministers are meeting on Monday morning to discuss President Trump’s surprise announcement of 30% tariffs on the European Union. Trump shared the plans on Saturday and said that the same rate, set to kick in on 1 August, would be applied to goods from Mexico.

European officials have been working to secure a deal with the US after the president threatened a 50% tariff on EU exports in May, up from an initially proposed 20% rate. President Trump then retracted the threat of a 50% duty, although retained separate tariffs on exports like steel, aluminium, and cars.

In response to Trump’s announcement over the weekend, the president of the European Commission Ursula von der Leyen said the EU would not impose retaliatory tariffs on US imports before 1 August, allowing time for negotiation.

Denmark’s foreign minister, Lars Løkke Rasmussen, also told reporters ahead of the meeting on Monday: “We shouldn’t impose countermeasures at this stage, but we should prepare to be ready to use all the tools in the toolbox.” 

He added: “So we want a deal, but there’s an old saying: ‘If you want peace, you have to prepare for war.'”

Maroš Šefčovič, the EU’s trade representative in its talks with the US, also said on Monday that negotiations would continue. “I’m absolutely 100% sure that a negotiated solution is much better than the tension which we might have after 1 August.”

He told reporters in Brussels: “I cannot imagine walking away without genuine effort. Having said that, the current uncertainty caused by unjustified tariffs cannot persist indefinitely and therefore we must prepare for all outcomes, including, if necessary, well-considered proportionate countermeasures.”

In light of US isolationism, the EU is also looking to expand trade with alternative partners. Leaders from the bloc will travel to China for a summit later this month, seeking to promote stronger relations despite disagreements over the alleged “dumping” of cheap Chinese goods in Europe. This accusation prompted the EU to impose its own tariffs on Chinese goods last year.

While in China for the summit, EU leaders will also be courting other Pacific nations like South Korea, Japan, Vietnam, Singapore, the Philippines, and Indonesia, whose prime minister visited Brussels over the weekend to sign a new economic partnership with the EU. 

The downbeat investor sentiment in Europe also comes despite pledges to increase defence spending. France’s president Emmanuel Macron on Sunday pledged to raise France’s military spending by €6.5 billion over the next two years. Macron said the 2026 defence budget would be raised by €3.5bn, and another €3bn in 2027.

United States President Donald Trump has informed Mexico and the European Union that they face tariffs of 30 percent starting next month.

This has created shock and is raising fears of an all-out trade war, but both Mexico and the EU say they want talks to continue.

So, what is Trump’s strategy – and what are the risks?

Presenter: James Bays

Guests:

Niall Stanage – columnist for The Hill

Greg Swenson – chairman of Republicans Overseas UK

Daniel Gros – director of the Institute for European Policymaking at Bocconi University

President Donald Trump has announced that the European Union and Mexico will face a 30% tariff on imports to the US from 1 August.

He warned he would impose even higher import taxes if either of the US trading partners decided to retaliate.

The 27-member EU – America’s biggest trading partner – said earlier this week it hoped to agree a deal with Washington before 1 August.

Trump has this week also said the US will impose new tariffs on goods from Japan, South Korea, Canada and Brazil, also starting from 1 August. Similar letters were sent this week to a number of smaller US trade partners.

In the letter sent on Friday to European Commission President Ursula von der Leyen, Trump wrote: “We have had years to discuss our trading relationship with the European Union, and have concluded that we must move away from these long-term-large, and persistent, trade deficits, engendered by your tariff, and non-tariff, policies and trade barriers.”

“Our relationship has been, unfortunately, far from reciprocal,” the letter added.

The EU has been a frequent target of Trump’s criticism. On 2 April, he proposed a 20% tariff for goods from the bloc and then threatened to raise that to 50% as trade talks stalled.

Washington and Brussels had hoped to reach an agreement before a deadline of 9 July, but there have been no announcements on progress.

In 2024, the US trade deficit with the bloc was $235.6bn (€202bn; £174bn), according to the office of the US trade representative.

Von der Leyen said the EU remained ready “to continue working towards an agreement by Aug 1”.

“Few economies in the world match the European Union’s level of openness and adherence to fair trading practices,” her statement added.

“We will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required.”

In his letter to Mexico’s leader, Trump said the country had not done enough to stop North America becoming a “Narco-Trafficking Playground”.

“Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough,” Trump added.

KUALA LUMPUR, Malaysia — U.S. Secretary of State Marco Rubio and Chinese Foreign Minister Wang Yi agreed Friday to explore “areas of potential cooperation” between Washington and Beijing, and stressed the importance of managing differences, following their first in-person meeting as they wrapped up a two-day regional security forum in Malaysia.

Rubio and Wang met Friday on the sidelines of the Assn. of Southeast Asian Nations, or ASEAN, regional forum in Kuala Lumpur, Malaysia, as tensions between the two global powers continue to rise over trade, security, and China’s support for Russia’s war in Ukraine.

“Look, we’re two big, powerful countries, and there are always going to be issues that we disagree on,” Rubio told reporters after the meeting. “I think there’s some areas of potential cooperation. I thought it was very constructive, positive meeting and a lot of work to do.”

Both sides need to build better communications and trust, he said.

Rubio also indicated that a potential visit to China by President Trump to meet with President Xi Jinping was likely, saying: “The odds are high. I think both sides want to see it happen.”

China’s Foreign Affairs Ministry, in a statement later Friday, echoed Rubio’s sentiment, calling the meeting “positive, pragmatic and constructive.”

The statement didn’t provide details on specific topics such as tariffs or China’s position on the Russia-Ukraine war, but it said that both countries agreed to “increase communication and dialogue” and “explore expanding areas of cooperation while managing differences.”

Wang called for “jointly finding a correct way for China and the U.S. to get along in the new era,” it said.

Trade takes a back seat

While tariffs loomed in the background, Rubio said that trade wasn’t a major focus of his talks because “I’m not the trade negotiator.”

“We certainly appreciate the role trade plays in our bilateral relationships with individual countries. But the bulk of our talks here have been about all the other things that we cooperate on,” he said.

The meeting with Wang was held less than 24 hours after Rubio met in Kuala Lumpur with another rival, Russian Foreign Minister Sergey Lavrov, during which they discussed potential new avenues to jump-start Russia-Ukraine peace talks.

The high-level meetings took place amid regional unease over U.S. policies — especially Trump’s threats to impose sweeping new tariffs on both allies and adversaries. Southeast Asian leaders voiced concerns, but according to Rubio, many prioritized discussions on security issues, their concerns about Chinese domination and desire for cooperation with the U.S.

“Of course, it’s raised. It’s an issue,” Rubio said. “But I wouldn’t say it solely defines our relationship with many of these countries. There are a lot of other issues that we work together on, and I think there was great enthusiasm that we were here and that we’re a part of this.”

European Union foreign policy chief Kaja Kallas warned separately that the U.S.-led trade war could backfire.

“There are no winners in trade wars,” she told reporters. “If you start a trade war with everyone, you make your partners weaker and China stronger.”

Kallas said that the EU doesn’t seek retaliation, but has tools available, if necessary.

Security issues loom large

Trump sees China as the biggest threat to the United States in multiple fields, not least technology and trade, and like previous U.S. presidents has watched the country greatly expand its influence globally while turning increasingly assertive in the Indo-Pacific, notably toward its small neighbors over the South China Sea and Taiwan.

His administration has warned of major tariffs on Chinese exports, though talks have made little progress.

Since President Biden was in office, Washington has also accused China of assisting Russia in rebuilding its military industrial sector to help it execute its war against Ukraine. Rubio said the Trump administration shares that view.

“I think the Chinese clearly have been supportive of the Russian effort,” he said. “They’ve been willing to help them as much as they can without getting caught.”

China criticizes Trump’s tariffs

Rubio and Wang had been shadowboxing during the two-day ASEAN meeting, with each touting the benefits of their partnership to Southeast Asian nations.

Rubio has played up cooperation, including signing a civil-nuclear cooperation agreement with Malaysia, while Wang has railed against Trump’s threatened tariffs and projected China as a stable counterweight in talks with ASEAN counterparts on the sidelines.

“The U.S. is abusing tariffs, wrecking the free trade system and disrupting the stability of the global supply chain,” Wang told Thai counterpart Maris Sangiampongsa, according to the Chinese Foreign Ministry.

In a meeting with Cambodian Deputy Prime Minister Prak Sokhonn, Wang said that the tariffs are “an attempt to deprive all parties of their legitimate right to development.” He said that “China is willing to be Cambodia’s trustworthy and reliable friend and partner.”

Wang also met with Lavrov on Thursday, where the two offered a joint message aimed at Washington.

“Russia and China both support ASEAN’s central role in regional cooperation … and are wary of certain major powers creating divisions and instigating confrontation in the region,” Russia’s Foreign Ministry said in a statement.

Australian Foreign Minister Penny Wong sided with Rubio’s call for a balanced Indo-Pacific, warning that “no one country should dominate, and no country should be dominated.” But like Kallas, she said that engagement with China remains vital.

“We want to see a region where there is a balance of power … where there is no coercion or duress,” Wong said.

Lee writes for the Associated Press. Huizhong Wu in Bangkok, and Eileen Ng in Kuala Lumpur, contributed to this report.

United States President Donald Trump has announced that he will raise import tariffs on most Canadian goods to 35 percent, even though Canada has agreed to rescind its planned digital services tax as the US demanded.

This comes as Trump sends “tariff letters” to a host of countries this week, notifying them of planned US trade levies to take effect on August 1 if trade deals are not struck before then.

What has Trump announced for Canada?

In late June, Trump threatened to end trade talks with Canada over its plans to push ahead with a new digital services tax, which would hit US technology companies financially. The US president said it was “a direct and blatant attack on our Country”. Canada quickly agreed to withdraw the tax.

But, in a letter released on his social media platform on Thursday this week, Trump nevertheless told Canadian Prime Minister Mark Carney that a new 35 percent tariff – an increase from the 25 percent rate originally imposed in March – would go into effect on August 1 and would rise if Canada retaliated with new tariffs of its own.

What do the US and Canada trade?

Canada is America’s second-largest trading partner, after Mexico. In 2024, Canada bought $349.4bn of US goods and exported $412.7bn, according to US Census Bureau data. The upshot is that Canada runs a $63.3bn trade surplus with the US.

Canada’s key exports to the US include oil and mineral fuels, cars and auto parts, as well as industrial machinery and nuclear reactors. On the other hand, it imports large amounts of transportation equipment, industrial chemicals and manufacturing technology from the US.

What US tariffs does Canada already face?

In his inaugural address after taking over the US presidency on January 20, Trump announced a 25 percent tariff on all Canadian goods and a 10 percent tariff on Canadian energy resources, claiming that Canada had a “growing footprint” in the production of fentanyl, a highly addictive and often deadly opioid drug.

He claimed Canada was not doing enough to prevent the flow of fentanyl into the US.

Those tariffs were paused for 30 days following assurances from Canada that appropriate action would be taken to curb the flow of fentanyl, but were then reimposed in early March after Trump declared that Canada had failed to do enough. They are now rising again, to 35 percent.

Canada, the biggest foreign supplier of steel and aluminium to the US, was also badly hit by Trump’s separate 25 percent tariffs on steel and aluminium, which he imposed globally in March. Trump doubled that for all countries to 50 percent in June, saying the measure would protect and bolster the US metals sector.

In March, Trump also announced a separate 25 percent tariff on imported cars and car parts. He said this would “take back” money from foreign countries that have been “taking our jobs” and “our wealth”.

Sectoral tariffs, on things like cars and industrial metals, are separate from country-wide levies.

For his part, Canadian Prime Minister Mark Carney described the auto tax move as a “direct attack” on Canadian workers.

Until the start of Trump’s second term as US president in January this year, Canada had enjoyed years of free trade relations with the US. It is understood that Mark Carney is still trying to find ways to satisfy Trump so that a 2018 free-trade deal between the US, Mexico and Canada (USMCA) – agreed during Trump’s first term in office – can be put back on track.

USMCA came into force on July 1, 2020, replacing the 1994 North American Free Trade Agreement (NAFTA). It is supposed to be reviewed every six years, and since Trump returned to office, it has been blighted by disputes and non-compliance issues. Some trade commentators have suggested the agreement won’t be extended next summer.

Trump’s Canada announcement this week also came after officials in Ottawa denounced yet another separate US plan to impose a 50 percent import tariff on copper earlier this week. Canada is one of the largest suppliers of the metal to the United States.

Why is Trump levying all these tariffs on Canada?

The Trump administration claims its tariffs on Canada are designed to force Ottawa to crack down on fentanyl smuggling into the US, despite only a modest flow of the drug over the border. Trump has also expressed frustration with his country’s trade deficit with Canada, which largely reflects oil purchases.

“I must mention that the flow of Fentanyl is hardly the only challenge we have with Canada, which has many Tariff, and Non-Tariff, Policies and Trade Barriers,” Trump wrote in the letter.

Besides more than 20 similar letters to other US trade partners so far this week, Trump says he will soon announce new tariffs for the European Union, too. As with Canada’s letter, Trump has promised to implement these new import levies from August 1.

Do Trump’s justifications for tariffs on Canada hold water?

Canadian government data shows that less than 0.1 percent of all seizures of fentanyl entering the US, from 2022-2024, were made at the Canadian border.

Almost all of rest was confiscated at the US border with Mexico. Carney has also publicly committed to “stop the scourge of fentanyl” in North America, and said his government wants to work alongside the US to protect communities in both countries.

Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1.

Canada has made vital progress to stop the scourge…

— Mark Carney (@MarkJCarney) July 11, 2025

Instead, in his first speech as prime minister, Carney said he believed that “the Americans want our resources, our water, our land, our country”.

He has had to push back on Trump’s taunts of making Canada the “51st state of America”. Indeed, Carney predicated his recent election win on the idea that Canada should keep its “elbows up”, as he put it.

During a meeting with Trump at the White House in Washington, DC, in May, Carney said: “Having met with the owners of Canada over the course of the campaign these last several months, it’s not for sale – won’t be for sale – ever.”

In recent months, Carney has also been strengthening ties with the United Kingdom and the EU in a bid to diversify its exports from the US.

Hours before Trump’s latest letter, Carney posted a picture of himself with British Prime Minister Keir Starmer on X, saying, “In the face of global trade challenges, the world is turning to reliable economic partners like Canada.”

In the face of global trade challenges, the world is turning to reliable economic partners like Canada. pic.twitter.com/KlsXJdhCSk

— Mark Carney (@MarkJCarney) July 10, 2025

What was the Canadian digital tax row about?

The US is home to some of the world’s biggest technology companies, including Apple, Alphabet/Google, Amazon and Meta. A new 3 percent digital services tax to be levied on tech companies deriving revenues from Canadian users, due to take effect in late June this year, could have cost those companies $2bn in additional taxes.

Trump called the new tax “a direct and blatant attack on our Country” in a Truth Social post in June. He added that the US would be “terminating ALL discussions on Trade with Canada, effective immediately”.

A few days after Trump suspended trade negotiations, Carney rescinded the tax in an effort to resume talks.

As such, Trump’s latest tariff letter to Carney has come in spite of what many had seen as a thawing of relations between the two leaders, who remain locked in trade negotiations.

How has Trump treated other countries?

So far this week, Trump has sent tariff letters to 23 heads of state, notifying them of new trade tariffs. On Wednesday, he told Brazil that he plans to impose a 50 percent tariff because of its “witch-hunt” against former President Jair Bolsonaro.

Bolsonaro, who is accused of plotting a coup, refused to publicly concede the 2022 presidential election, which he lost to current President Luiz Inacio “Lula” da Silva. Trump was similarly indicted in relation to efforts to overturn his own election loss in 2020.

Elsewhere, Trump’s tariff letters reflect his administration’s failure to finalise dozens of trade agreements that he claimed would be easy to negotiate. Shortly after unveiling his April 2 “Liberation Day” trade levies, Trump announced a 90-day pause to try and work out these agreements.

But on Monday, the president was forced to extend this pause again until August 1. For the most part, Trump says he is trying to rebalance large trading deficits, whereby the US imports more than it exports. However, some targeted countries – including Brazil – have trade imbalances in the US’s favour rather than their own.

Other than Brazil, recipients of tariff letters on Wednesday included the Philippines, Moldova, Sri Lanka, Brunei, Libya, Algeria and Iraq. They were notified of tariffs as high as 30 percent.

The rates Trump said would be imposed on Sri Lanka, Moldova, Iraq and Libya were lower than those he initially announced in early April. Tariffs on goods from the Philippines and Brunei were higher. The rate for goods from Algeria remained the same.

On Monday, he notified Japan, South Korea and a dozen other economies of tariffs ranging from 25 percent to 40 percent.

In an interview with NBC News on Thursday, Trump said: “We’re just going to say all of the remaining countries are going to pay, whether it’s 20 percent or 15 percent. We’ll work that out now.”

Currently, the global baseline minimum tariff rate for nearly all US trading partners is 10 percent.

How have markets reacted to the tariff letters?

While the White House unfurled a stream of tariff announcements this week, financial markets have generally shrugged off Trump’s threats. The S&P 500 – the stock market index tracking the performance of the 500 largest companies in the US – and the tech-heavy Nasdaq Composite both closed at record highs on Thursday.

Experts say that recent gains in the S&P 500 suggest many investors think that Trump will ultimately back down on his tariff increases.

Financiers have established a name for the president’s policy flip-flopping – it’s called TACO: “Trump Always Chickens Out”. Washington, so the theory goes, does not have a high tolerance for economic pressure and will back off when tariffs cause pain.

In a provocative move that fuses foreign policy with ideological allegiance, United States President Donald Trump has threatened to impose a 50 percent tariff on all Brazilian exports, effective August 1, 2025. The announcement came in a letter posted on social media, in which Trump explicitly linked the proposed tariffs to two ongoing domestic issues in Brazil: the judicial proceedings against far-right former president Jair Bolsonaro – whom Trump described as the victim of a political “witch-hunt” – and recent rulings by the Brazilian Supreme Court against US-based social media companies, including former Trump ally Elon Musk’s X. By doing so, Trump has escalated a trade dispute into a direct attempt to influence Brazil’s internal affairs – using economic pressure to serve political ends and undermining the country’s sovereignty in the process.

Brazilian President Luiz Inacio “Lula” da Silva responded swiftly and unequivocally: “Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage,” he declared, adding that Brazil’s judiciary is autonomous and not subject to interference or threat. Under Brazilian law, digital platforms are obligated to monitor and remove content that incites violence or undermines democratic institutions, and they may be held legally accountable when they fail to do so.

While a 50 percent tariff on Brazilian exports might appear economically devastating, it could in fact become a strategic turning point – and even a blessing in disguise. Brazil has both the resilience and the diplomatic tools to weather this storm and emerge stronger.

The United States is one of Brazil’s largest trading partners, typically ranking second after China – or third if the European Union is considered as a single bloc. Brazilian exports to the US include industrial goods such as Embraer aircraft, iron and steel, crude oil, coffee and semiprecious stones, alongside agricultural products like beef, orange juice, eggs and tobacco. In return, Brazil imports large quantities of US-manufactured goods, including machinery, electronics, medical equipment, chemicals and refined petroleum. Notably, the US has maintained a trade surplus with Brazil for the past five years.

Should Washington proceed with the 50 percent tariffs, Brasília has several retaliatory options under its Economic Reciprocity Law. These include raising import tariffs on US goods, suspending clauses in bilateral trade agreements, and – in exceptional cases such as this – withholding recognition of US patents or suspending royalty payments to American companies. The impact on US consumers could be immediate and tangible, with breakfast staples like coffee, eggs and orange juice spiking in price.

Brazil is not without friends or alternatives. The country has already been deepening ties with fellow BRICS members (China, India, Russia, South Africa) and newer partners in the bloc. This dispute only strengthens the case for accelerating such integration. Diversifying export markets and embracing South-South cooperation isn’t just ideological; it’s economically pragmatic.

Closer to home, the tension presents an opportunity to reinvigorate South American integration. The long-held regional dream of enhanced collaboration – from trade to infrastructure – could gain new momentum as Brazil reassesses its global alignments. This realignment could breathe life into stalled Mercosur bloc initiatives and reduce dependence on an increasingly erratic relationship with the US.

Ironically, Trump’s aggressive move may weaken his ideological allies in Brazil. While Bolsonaro supporters (including members of his family) have praised the US president’s intervention, they may be missing its broader political consequences. Trump’s past influence abroad has often backfired, with right-wing candidates in countries like Canada and Australia paying the price. A similar outcome in Brazil is not unthinkable. Lula, who has consistently positioned himself as a pragmatic, diplomatic and stabilising global figure, may gain political ground from this latest episode. His defence of sovereignty, democratic institutions and balanced international relations could resonate more deeply with Brazilian voters ahead of next year’s elections.

This moment need not be seen as a crisis. Rather, it presents a pivotal opportunity for Brazil to assert itself as a sovereign economic power – less reliant on Washington and more engaged with an emerging multipolar global order. If Lula navigates it wisely, Trump’s latest provocation may deliver not only a diplomatic win but a significant boost to his re-election prospects. In attempting to punish Brazil, Trump may well have undercut both his foreign policy ambitions and his ideological allies abroad.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.

July 11 (UPI) — President Donald Trump has announced a 35% tariff on all imports from Canada, reigniting a trade war with the United States’ closest ally and one of its most important trading partners, threatening to derail ongoing trade negotiations between the two.

Trump announced the tariffs in a letter to Prime Minister Mark Carney of Canada on Thursday, stating the new punitive measures will go into effect Aug. 1.

“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, it will be added onto the 35% that we charge” the American president threatened.

Trump claims the tariffs are in response to fentanyl being smuggled into the United States over its northern border, for which he has already imposed a 10% tariff on Canada.

In response, Canada vowed to increase border security.

Statistics from the Government of Canada show that fentanyl seizures by U.S. border officials at the Canada-U.S. border represent less than 0.1% of U.S. fentanyl seizures between 2022 and 2024.

According to the statistics, only 59 pounds of the synthetic opioid were seized at their shared border between 2022 and 2024, compared to nearly 62,000 pounds seized at the southern border in that same timeframe.

“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump told Carney in the letter Thursday.

“These Tariffs may be modified, upward of downward, depending on our relations with your Country.”

Trump said the tariffs are separate from the sectorial tariffs he earlier imposed, including a 50% levy on all imported steel and aluminum products, a 25% tariff on non-USMCA-compliant autos and auto parts and a 50% tariff on cooper imports, which has yet to take effect.

Canada has retaliated with a 25% tariff on tens of billions of dollars worth of U.S. products.

Trump’s trade war and threats to annex Canada have soured relations with the Great White North, with Carney — whose Liberal Party won parliamentary elections in late April largely on anti-Trump sentiment — describing the American president’s actions as a “betrayal” and turning to Europe in an effort to lessen Canada’s dependence on its southern neighbor.

Carney late Thursday issued a statement saying he is committed to working with the United States to “stop the scourge of fentanyl in North America,” while explaining he has “steadfastly defended our workers and businesses” in negotiations with the United States.

Trump’s tariffs were not mentioned.

“We are building Canada strong,” he said on X. “The federal government, provinces and territories are making significant progress in building one Canadian economy.”

The tariffs come as the United States and Canada had set a goal of signing a new trade deal by July 21.

Trump had called off trade talks last month over a new Canadian tax on technology firms generating revenue, but which was essentially rescinded by Carney hours before it was to go into effect in order for trade talks to resume.

The new tariffs on Canada came as Trump announced a flurry of economic levies on a number of countries.

Trump often turns to tariffs as a tool to equalize trade deficits, as a negotiation tactic and as an attempt to spur domestic industry.

US president also eyes blanket tariffs of 15 to 20 percent on other trading partners as his trade war widens.

President Donald Trump has announced that the United States would impose a 35 percent tariff on imports from Canada next month, while eyeing blanket tariffs of 15 or 20 percent on most other trading partners as he broadens his trade war.

In a letter released on his social media platform on Thursday, Trump told Canadian Prime Minister Mark Carney the new rate would go into effect on August 1 and would go up if Canada retaliated.

It was the latest of more than 20 such letters issued by Trump since Monday, as he continues to pursue his trade war threats against dozens of economies.

The letter on Thursday came despite what had been warming relations between Trump and Carney.

The Canadian leader visited the White House on May 6 and held a cordial meeting with Trump in the Oval Office.

They met again at the G7 summit last month in Canada, where leaders pushed Trump to back away from his punishing trade war.

In an interview with NBC News published on Thursday, Trump also said that other trading partners that had not yet received such letters would likely face blanket tariffs.

“Not everybody has to get a letter. You know that. We’re just setting our tariffs,” Trump said in the interview.

“We’re just going to say all of the remaining countries are going to pay, whether it’s 20 percent or 15 percent. We’ll work that out now,” Trump was quoted as saying by the network.

In recent days, he also set new tariffs on a number of countries, including allies Japan and South Korea, along with a 50 percent tariff on copper.

On Friday, Myanmar, which was also hit by stiff Trump tariffs, pleaded with Trump for a reduction in the 40 percent tariff rate, with ruling Senior General Min Aung Hlaing saying he is ready to send a negotiation team to Washington if needed, according to state media.

Locked in talks

Canada and the US are locked in trade negotiations, hoping to reach a deal by July 21, and the latest threat seems to put that deadline in jeopardy.

Canada, as well as Mexico, are trying to find ways to satisfy Trump so that the free trade deal uniting the three countries, known as the USMCA, can be put back on track.

The United States-Mexico-Canada Agreement replaced the previous NAFTA accord in July 2020, after Trump successfully pushed for a renegotiation during his first term in office.

It was due to be reviewed by July of next year, but Trump accelerated the process by launching his trade wars after taking office in January.

Canadian and Mexican products were initially hard hit by 25 percent US tariffs, with a lower rate for Canadian energy.

Trump targeted both neighbours, saying they did not do enough on undocumented immigration and the flow of illicit drugs across borders.

But he eventually announced exemptions for goods entering his country under the USMCA, covering large swaths of products. Potash, used as fertiliser, got a lower rate as well.

RIO DE JANEIRO — Brazilian President Luiz Inácio Lula da Silva said Thursday that he will impose retaliatory tariffs on the United States if President Donald Trump follows through on a pledge to boost import taxes by 50% over the South American country’s criminal trial against his predecessor, Jair Bolsonaro.

Lula said he will trigger Brazil’s reciprocity law approved by Congress earlier this year if negotiations with the U.S. fail.

“If there’s no negotiation, the reciprocity law will be put to work. If he charges 50 [% tariffs] from us, we will charge 50 from them,” Lula told Record in excerpts of an interview. “Respect is good. I like to offer mine, and I like to receive it.”

Lula’s comments raise the risk of a tariffs war erupting between the two countries, similar to what has happened between the U.S. and China. Trump has vowed to respond forcefully if countries seek to punish the U.S. by adding tariffs of their own.

The tariffs letter that Trump sent to Brazil — and posted on social media Wednesday — railing against the “witch hunt” trial against Bolsonaro opened up a new front in his trade wars, with the U.S. leader directly using import taxes to interfere with another nation’s domestic politics. Trump has already tried to use tariffs to ostensibly combat fentanyl trafficking and as a negotiating tool to change how other nations tax digital services and regulate their economies.

In Brazil’s case, Trump is trying to dictate the outcome of the criminal trial of Bolsonaro, an ally who, like Trump, has been charged with attempting to overturn a presidential election. Bolsonaro maintains that he is being politically persecuted by Brazil’s Supreme Court over his charges on the alleged plot to remain in power after his 2022 election loss to Lula.

“There’s nothing Lula or Brazil can do about Bolsonaro’s trial,” said Carlos Melo, a political science professor at Insper University in Sao Paulo. “Any change in that would be Brazil’s capitulation. Bolsonaro’s situation here won’t change. How do you negotiate over that?”

Lula ordered his diplomats on Thursday to return Trump’s letter if it physically arrives at the presidential palace in Brasilia. The document attacks the country’s judiciary and mentions recent rulings on social media companies among the reasons why goods from the South American nation will have higher tariffs from Aug. 1.

Trade negotiations now ‘up in the air’

Trump has initiated his tariffs under the 1977 International Emergency Economic Powers Act, saying in April that the persistent deficit between what the U.S. exports and what it imports is a national crisis.

But the U.S. runs a trade surplus with Brazil, undermining some of the rationale.

A staffer of Brazil’s foreign ministry told the Associated Press that trade negotiations that were ongoing since Trump imposed a first set of tariffs in April are now “up in the air.”

Some members of the Lula administration say Trump’s move is actually aimed at Brazil’s connection with other Southern economies, as displayed on Sunday at the summit of BRICS nations hosted in Rio de Janeiro. Brazil’s president once again mentioned the hope for an alternative currency to the dollar for transactions, a topic that frequently draws Trump’s ire.

“Trump was never worried about democracy anywhere, much less with Bolsonaro’s destiny,” said Gleisi Hoffmann, Brazil’s institutional relations minister. “What he fears is the strengthening of the commercial and financial relations of the global south, which Brazil is helping to build in the BRICS bloc and in other forums. We won’t be Trump’s hostages.”

Brazil’s new unity

Trump’s interference in Brazilian affairs has brought a sense of unity that was largely absent in the politically divided nation. Some of Bolsonaro’s allies claimed Lula had drawn the U.S. president’s anger with other decisions, including criticism of Israel’s war in Gaza. But other supporters of the former president chose to ask for prudence in negotiations.

Daily newspaper O Estado de S. Paulo, a frequent critic of Lula and his administration, said in an editorial on Thursday that Trump’s move against the Brazilian government is “a mafia thing.” It also said Lula’s reaction was correct, a rare feature for the newspaper.

“Trump meddles in a degrading form into Brazil’s affairs,” the editorial said. “It is true that Trump has no respect for liturgy and rituals of the relations between States, but even for his standards the letter sent to the Brazilian government crossed every boundary.”

While Trump has talked tough, it has not necessarily produced his desired political outcomes abroad. Canadians recently elected Mark Carney as prime minister, with his Liberal Party reenergized by Trump’s tariffs and threats to make Canada the 51st U.S. state.

Analysts also see Trump’s attempt to interfere in the country’s domestic affairs as a potential backfire for Bolsonaro during his trial and a push for Lula, whose reelection bid was facing unpopularity headwinds this year.

“The reaction of a lot of people is that this is a political gift to Lula,” said Andre Pagliarini, a professor of history and international studies at Louisiana State University who is also affiliated with the Quincy Institute for Responsible Statecraft.

Thomas Traumann, an independent political consultant and former Brazilian minister, called Trump’s move “a game changer” for next year’s election.

“Trump put Lula back in the game,” Traumann said. “This gives Lula a narrative, puts Bolsonaro as the guilty part for any economic problems.”

Exceeding the authority

The U.S. Court of International Trade ruled in May that Trump had exceeded his authority by declaring an emergency to impose tariffs without congressional approval. The Trump administration is appealing that decision, but opponents plan to use his Brazil letter to bolster their case.

“This is a brazenly illegal effort by Donald Trump to sacrifice the economy to settle his own personal scores, and it is far outside his legal authority,” said Democratic Oregon Sen. Ron Wyden.

The Republican administration has argued that their tariffs are now relatively harmless for the U.S. economy, since inflation has trended down in recent months. But many companies stockpiled imports to get ahead of the import taxes, and it’s unclear what happens when their inventories dwindle and consumers consider the risk of higher prices. Most outside economic analyses expect growth to decline.

In Brazil, Trump’s interest in Bolsonaro’s trial is expected to weigh over the trial. Media outlets have reported that lawmakers and judges are worried the former president will try to leave Brazil for the U.S. if he is convicted.

“We can’t rule out that Trump will give him some sort of exile later and is hiking tariffs to prepare his excuse,” said Melo, the professor in Sao Paulo. Bolsonaro’s passport was seized by Brazil’s Supreme Court because he is perceived as a flight risk.

Lawmaker Eduardo Bolsonaro, a son of the former president, moved to the U.S. in March. On Wednesday night, he asked his supporters on X to post “their thank you to President Donald Trump.”

In Thursday’s interview, Lula said the elder Bolsonaro “should take the responsibility for agreeing with Trump’s taxation to Brazil.”

“His son went there to make up Trump’s mind, then he [Trump] writes a letter to speak about a case that is on the hands of the Supreme Court. A case that is not a political trial. What is under investigation is the evidence of the case,” Lula said.

Savarese and Boak write for the Associated Press. Boak reported from Washington.

United States President Donald Trump has threatened Brazil with a 50 percent tariff, citing the criminal charges against its former president and his political ally Jair Bolsonaro, who is accused of plotting a coup.

In a letter to Luiz Inacio Lula da Silva, Brazil’s current president, Trump said on Wednesday that the treatment of Bolsonaro, who refused to publicly concede the presidential election that he lost to Lula in 2022, “is an international disgrace”.

The letter was one of 22 tariff notices Trump sent this week to various countries. On Monday, the president extended a pause on his sweeping global tariffs from Wednesday to August 1.

For the most part, Trump says he is trying to rebalance large trading deficits, whereby the US imports more from a country than it exports there.

But the US has a trade surplus with Brazil, and the tariff threatened against South America’s largest economy was higher than those received by other countries, which have mostly fallen in the range of 25 to 40 percent.

The escalation in tensions between the US and Brazil came as Lula hosted representatives from China, Russia, Iran and other nations for a BRICS summit of emerging economies in Rio de Janeiro this week.

Leaders attending the summit criticised Trump’s tariffs and the recent US and Israeli bombing of Iran, drawing threats from Trump of a 10 percent additional tariff for “anti-American” BRICS-aligned countries.

What has Trump announced in relation to Brazil?

Trump has continued to publish letters informing US trading partners of tariffs planned to begin on August 1 if they can’t reach trade deals with his government before that. So far, he has sent 22 letters to heads of state. More could still come.

While the letters have mostly denounced trade between those countries and the US as “far from reciprocal”, Trump’s letter to Lula was stronger.

He wrote that “due in part to Brazil’s insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans”, he planned to levy a 50 percent tax on Brazilian goods exported to the US.

“Please understand that the 50 percent number is far less than what is needed to have the Level Playing Field we must have with your Country,” Trump added. “And it is necessary to have this to rectify the grave injustices of the current regime.”

He said: “The way that Brazil has treated former President Bolsonaro, a Highly Respected Leader throughout the World during his term, including by the United States, is an international disgrace.”

How has Brazil responded?

Lula promised to hit back with tariffs of his own if Trump follows through with his threat.

“Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage,” Lula said in a post on X.

He added that the criminal case against Bolsonaro, who challenged the outcome of Brazil’s 2022 election, is a matter solely for the justice system and “not subject to interference or threat”.

Why is Trump targeting Brazil when the US has a trade surplus?

According to the Office of the US Trade Representative, the US imported $42.3bn of goods from Brazil in 2024 and exported $49.7bn.

In short, Brazil’s purchases from the US amounted to roughly $7.4bn more than US purchases from Brazil.

Ever since the announcement of his “Liberation Day” tariffs, on April 2, Trump has consistently stated his desire to reduce America’s trade deficits with its trading partners.

In Trump’s view, deficit countries, such as the US, import goods that could have been produced at home, harming domestic employment and economic growth in the process.

However, “Brazil has historically run a small trade deficit with the US”, said Elizabeth Johnson, an economic analyst at TS Lombard, a strategy and political research firm. “It is very much political. … It is part of the Bolsonaro family’s effort to get Trump to weigh in on the ongoing trial of Jair Bolsonaro.”

Indeed, this is not the first time Trump has used the threat of tariffs to try to alter other countries’ domestic policy decisions.

Since returning to office in January, he has threatened a 25 percent tariff on Colombian goods and said he would double that if the country refused to accept deportees from the US. Colombia ultimately accepted his terms.

What trade does the US do with Brazil?

In 2023, the balance of trade (imports plus exports) between the US and Brazil amounted to $104bn, making Brazil the US’s 15th largest trading partner.

Top US exports to Brazil last year included aircraft and spacecraft (amounting to about $7bn), fossil fuels ($9bn) and industrial machinery such as nuclear reactors and electrical equipment (roughly $10bn), according to US Census Bureau data.

Brazil’s exports to the US in 2023 were led by crude oil and fossil fuels (about $8.8bn), iron and steel products ($5bn) and soya beans ($3.3bn).

What impact could a 50 percent tariff have on Brazil’s economy?

It could severely hurt companies highly exposed to the US market. In particular, firms in the base metals and agricultural sectors could be badly hit.

According to Johnson, Trump’s tariff threat could be a drag on economic growth because the US is Brazil’s second largest export market after China.

Indeed, Goldman Sachs has calculated that Brazil’s exports to the US represent 2 percent of its gross domestic product and Trump’s tariffs could cut its economic growth by 0.3 to 0.4 percentage points.

What impact could this have on the US economy?

If the tariffs are implemented, US firms that buy Brazilian goods would most likely have to find alternative sources for those products, and this could take time.

In the meantime, “the semifinished steel products from Brazil used in American manufacturing mean [that higher tariffs would be] a negative,” Johnson told Al Jazeera.

In addition, “beef, orange juice, coffee” and other farm products travelling from Brazil into the US would become much more expensive, she said.

On the other hand, Johnson suggested, “There’s room for Trump to score a win with Brazil by allowing more ethanol exports into the US, which would help [American] farmers.”

What charges is Bolsonaro facing in Brazil?

Bolsonaro, who was president of Brazil from 2019 to 2023, refused to concede his presidential election loss to his left-wing rival in 2022.

Bolsonaro raised questions about the accuracy of the election result, claiming that some electronic voting machines had been faulty.

Shortly after Lula took office in January 2023, thousands of Bolsonaro’s supporters angered over the election result stormed the presidential palace, Congress and the Supreme Court in the capital, Brasilia.

Now, Bolsonaro is facing criminal charges for allegedly plotting a coup and for alleged actions he took to overturn the 2022 election result.

Bolsonaro and 33 other people were charged this year, and the ex-president’s case is being heard by the Supreme Court. He could face 40 years in prison if found guilty.

Bolsonaro has denied any wrongdoing and has framed the trial as a politically motivated attack.

Trump, who also falsely claimed he had beaten Joe Biden in the 2020 presidential election, had faced criminal charges related to seeking to overturn that election. His supporters also stormed the US Capitol before Biden took office, seeking to stop the certification of the election results.

Trump has highlighted what he regards as parallels between himself and Bolsonaro. On Monday, he wrote on social media that he empathised with what was happening to Bolsonaro: “It happened to me, times 10.”

Which other countries were notified of new tariffs?

Other than Brazil, recipients of tariff letters on Wednesday included the Philippines, Moldova, Sri Lanka, Brunei, Libya, Algeria and Iraq. They were notified of tariffs as high as 30 percent.

The rates Trump said would be imposed on Sri Lanka, Moldova, Iraq and Libya were lower than those he initially announced in early April.

Tariffs on goods from the Philippines and Brunei were higher. The rate for goods from Algeria remained the same.

Trump has said companies that move production to the US will be exempt from tariffs. But he also warned that if countries retaliate, they could face even higher US duties.

The US and its largest trading partners have been negotiating trade deals since Trump announced the tariffs. But so far, only Vietnam and the United Kingdom have reached new deals while a partial agreement has been reached with China.

More recently, Trump administration officials have indicated that deals with India and the European Union may be imminent.

Published on
10/07/2025 – 17:38 GMT+2

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The EU expects trade relations with the US to remain difficult, even once a principle agreement is reached to resolve the tariff dispute between the two transatlantic partners, according to EU diplomats.

“We are working non-stop to find an initial agreement with the US – to keep tariffs as low as possible, and to provide the stability that businesses need,” Commission President Ursula von der Leyen said on Thursday, adding: “But we are also not naïve. We know the relationship with the US may not return to what it once was.”

The EU is awaiting a decision from US President Donald Trump, who has an EU-US trade agreement on his desk with a view to resolve the tariff dispute that has been ongoing since mid-March, according to remarks by his trade secretary Howard Lutnick in the US media.

The US currently imposes 50% tariffs on EU steel and aluminium, 25% on cars and 10% on all EU imports.

But though a framework agreementnow appears within reach, that will only constitute a first step toward a more comprehensive trade deal, and what comes next is causing concern among Europeans.

Having long advocated a zero-rated tariff offer on all industrial goods from both sides of the Atlantic, the Commission has now settled on a baseline tariff rate of 10% on EU goods arriving in the US. Exemptions may apply to aircraft and spirits, but progress on negotiations on other strategic sectors—such as cars, aluminium, steel, and pharmaceuticals—remains faltering.

The EU diplomat said that member states will not be satisfied with the agreement in principle said now to be in reach.

“Most people expect a deal, but if there’s a deal that doesn’t bring us to a better place from a European perspective than where we were before, we’ll have increased tariffs, it will affect negatively trade between the EU and the US,” he said.

Another EU diplomat predicted difficult negotiations among the 27 EU countries. Once the agreement in principle is approved, each country will take out its calculator to assess how its economy is affected, and what will need to be negotiated in a more comprehensive agreement to limit the negative impact on its trade.

In the short term, tensions could be high over whether the EU should implement the €21 billion retaliation list targeting US products, which has been suspended until July 14. Some countries, like Germany and Italy—highly exposed to trade with the US—favour a flexible, non-escalatory approach. Others, like France, want to show strength.

A second retaliation list is also reportedly ready. According to diplomats, the amount proposed by the Commission—€95 billion worth of US products—has been reduced. However, the Commission said that its implementation has not yet been determined.

KUALA LUMPUR, Malaysia — U.S. Secretary of State Marco Rubio said Thursday that the U.S. and Russia have exchanged new ideas for Ukraine peace talks after he met with his Russian counterpart in Malaysia Thursday.

“I think it’s a new and a different approach,” Rubio told reporters after talks with Russian Foreign Minister Sergey Lavrov. “I wouldn’t characterize it as something that guarantees a peace, but it’s a concept that, you know, that I’ll take back to the president.” He didn’t elaborate.

Rubio added that President Trump has been “disappointed and frustrated that there’s not been more flexibility on the Russian side” to bring about an end to the conflict.

“We need to see a roadmap moving forward about how this conflict can conclude. And then we shared some ideas about what that might look like,” he said of the 50-minute meeting. “We’re going to continue to stay involved where we see opportunities to make a difference.”

In a statement released shortly after Thursday’s meeting, Russia’s Foreign Ministry said that “substantive and frank exchange of views” had taken place on issues including Ukraine, Iran, Syria, and other global problems.

“Both countries reaffirmed their mutual commitment to finding peaceful solutions to conflicts, restoring Russian-American economic and humanitarian cooperation, and unimpeded contact between the societies of the two countries, something which could be facilitated by resuming direct air traffic,” the statement said. “The importance of further work to normalize bilateral diplomatic relations was also emphasized.”

The two men held talks in Kuala Lumpur on the sidelines of the annual Association of Southeast Asian Nations Regional Forum, which brings together 10 ASEAN members and their most important diplomatic partners including Russia, China, Japan, South Korea, European nations and the U.S.

The meeting was their second encounter since Rubio took office, although they have spoken by phone several times. Their first meeting took place in February in Riyadh, Saudi Arabia, as the Trump administration sought to test Russia and Ukraine on their willingness to make peace.

Thursday’s meeting occurred shortly after the U.S. resumed some shipments of defensive weapons to Ukraine following a pause, ostensibly for the Pentagon to review domestic munitions stocks, that was cheered in Moscow.

The resumption comes as Russia fires escalating air attacks on Ukraine and as Trump has become increasingly frustrated with Russian President Vladimir Putin.

U.S. diplomatic push could be overshadowed by tariff threats

Rubio was also seeing other foreign ministers, including many whose countries face tariffs set to be imposed Aug. 1.

“These letters that are going out in these trade changes are happening with every country in the world,” Rubio told reporters. “Anywhere in the world I would have traveled this week they got a letter.”

Rubio sought to assuage concerns as he held group talks with ASEAN foreign ministers.

“The Indo Pacific, the region, remains a focal point of U.S. foreign policy,” he told them. “When I hear in the news that perhaps the United States or the world might be distracted by events in other parts of the planet, I would say distraction is impossible, because it is our strong view and the reality that this century and the story of next 50 years will largely be written here in this region.”

“These are relationships and partnerships that we intend to continue to build on without seeking the approval or the permission of any other actor in the region of the world,” Rubio said in an apparent reference to China.

Trump notified several countries on Monday and Wednesday that they will face higher tariffs if they don’t make trade deals with the U.S. Among them are eight of ASEAN’s 10 members.

U.S. State Department officials said tariffs and trade won’t be Rubio’s focus during the meetings, which Trump’s Republican administration hopes will prioritize maritime safety and security in the South China Sea, where China has become increasingly aggressive toward its small neighbors, as well as combating transnational crime.

But Rubio may be hard-pressed to avoid the tariff issue that has vexed some of Washington’s closest allies and partners in Asia, including Japan and South Korea and most members of ASEAN, which Trump says would face 25% tariffs if there is no deal.

Rubio met earlier Thurday with Malaysian Prime Minister Anwar Ibrahim, who has warned global trade is being weaponized to coerce weaker nations. Anwar urged the bloc Wednesday to strengthen regional trade and reduce reliance on external powers.

Rubio’s “talking points on the China threat will not resonate with officials whose industries are being battered by 30-40% tariffs,” said Danny Russel, vice president of the Asia Society Policy Institute and a former assistant secretary of state for East Asia and the Pacific during the Obama administration.

When Anwar said “ASEAN will approach challenges ‘as a united bloc’ he wasn’t talking about Chinese coercion but about U.S. tariffs,” Russel noted.

Majority of ASEAN members face major tariff hikes

Among ASEAN states, Trump has announced tariffs on almost all of the bloc’s 10 members.

Trump sent tariff letters to two more ASEAN members Wednesday: Brunei, whose imports would be taxed at 25%, and the Philippines at 20%. Others hit this week include Cambodia at 36%, Indonesia at 32%, Laos at 40%, Malaysia at 25%, Myanmar at 40% and Thailand at 36%.

Vietnam recently agreed to a trade deal for a 20% tariffs on its imports, while Singapore still faces a 10% tariff that was imposed in April. The Trump administration has courted most Southeast Asian nations in a bid to blunt or at least temper China’s push to dominate the region.

In Kuala Lumpur, Rubio also will likely come face-to-face with China’s foreign minister during his visit.

Chinese Foreign Minister Wang Yi is a veteran of such gatherings and “fluent in ASEAN principles and conventions,” while Rubio “is a rookie trying to sell an ‘America First’ message to a deeply skeptical audience,” Russel noted.

Issues with China remain substantial, including trade, human rights, militarization of the South China Sea and China’s support for Russia in Ukraine.

U.S. officials continue to accuse China of resupplying and revamping Russia’s military industrial sector, allowing it to produce additional weapons that can be used to attack Ukraine.

Earlier on Thursday, Rubio signed a memorandum on civilian nuclear energy with Malaysia’s foreign minister, which will pave the way for negotiations on a more formal nuclear cooperation deal, known as a 123 agreement after the section of U.S. law allowing such programs.

Those agreements allow the U.S. government and U.S. companies to work with and invest in civilian energy nuclear programs in other countries under strict supervision.

Lee writes for the Associated Press. Eileen Ng contributed to this report.