Trump’s ‘Tariff Day’: Our Reaction
As Trump issues new tariff letters, Transform Trade calls for the UK Government to support the Global South
The 9th July was billed by Donald Trump as the day that tariffs, announced 3 months previously, would be implemented against any country that hadn’t cut a trade deal. He promised 90 deals in 90 days but only got two across the line. That means that countries in the Global South still face uncertainty and the threat of eye-watering tariffs.
The US didn’t implement their threatened tariffs. This will have come as a relief to the many countries that had few options for avoiding up to 50% charges on their exports.
However, Trump has set a new deadline of 1st August and issued a set of letters to various countries reiterating his accusations of unfair provisions. He has also announced a different set of tariffs that will be applicable from 1st August.
In a letter to Bangladesh, the US is reported to have invited the country to participate in “the extraordinary Economy of the United States, the Number One market in the World, by far” (capitalisation in the original). In order to avoid tariffs, the US states that Bangladeshi companies must “build or manufacture product [sic] within the United States.”
Transform Trade believes the demands being made of countries in the Global South by the United States are unrealistic and unfair.
We are deeply concerned that the US is undermining the well-established principle of special and differential treatment for countries in the Global South.
In the context of a global economic downturn and the impacts of climate change, even the uncertainty generated by changing deadlines and tariff levels is hugely damaging.
Transform Trade are calling on the UK Government to use its influence with the US to stress the importance of maintaining the principle of Special and Differential Treatment, as established by the World Trade Organisation, to remove tariffs from the world’s poorest countries, who represent a tiny proportion of US trade, and to reinstate preferential treatment for those countries.
The UK can also support countries in the Global South to weather the storm by taking unilateral measures.
As a matter of urgency, it must ensure that its own trade policies are well aligned with commitments under the Sustainable Development Goals, including by:
Introducing a Business, Human Rights and Environment Act;
Only opening new negotiations on Economic Partnership Agreements (EPAS) if they are in the interest of partner countries
Suspending EPAs that are damaging to Global South priorities;
Introducing a Fashion Watchdog to ensure fairness in garments supply chains that are key to many Global South economies;
Taking steps to address volatility in supply chains that are critical to Global South economies, including coffee and cocoa.