Donald Trump continued to fire off letters threatening steep US tariffs on foreign exports, targeting countries including Brunei, Libya and Moldova.
The US president had been scheduled to hike tariffs on dozens of countries on Wednesday. Earlier this week he announced a fresh three-week delay, to 1 August, but started announcing new rates that countries would face unless they strike a deal with the White House.
After announcing plans on Monday for US tariffs of up to 40% on goods imported from 14 countries, including Bangladesh, Japan and South Korea, Trump wrote to the leaders of a further six countries on Wednesday, and published each letter.
He claimed exporters in Algeria, Iraq, Libya and Sri Lanka would face a US tariff of 30%, while exporters in Brunei, Moldova and the Philippines would face a 25% tariff.
“These Tariffs may be modified, upward or downward, depending on our relationship with your Country,” Trump wrote. A string of delays and rate changes have frustrated businesses in the US and around the world.
On Tuesday, Trump vowed to introduce US tariffs of up to 200% on foreign drugs and 50% on copper, propelling US prices of the latter to record highs.
But appearing alongside the leaders of Gabon, Guinea-Bissau, Liberia, Mauritania and Senegal at the White House on Wednesday, the president indicated that the five African nations were unlikely to face US tariffs as they intended to lower their own tariffs on US exports.
Trump’s latest threats have heightened fears that his erratic trade strategy risks exacerbating inflation across the US, having repeatedly pledged on the campaign trail to bring down prices rapidly.
Trump appears aware of this apprehension. “I brought down costs more than any President in recorded history,” he wrote on social media late on Tuesday. “The Crooked Democrats are using the opposite narrative, even though they know it is a total LIE.”
Analysis by Oxford Economics indicated that the US effective tariff rate on imports from overseas would rise to about 20% after the latest tariff letters. “That is up from 17% but less than our recession threshold of 25%-28%,” said Michael Pearce, its deputy US economist at Oxford Economics.
“Our assumption is that most countries will secure a deal or extension to avoid tariff increases,” said Pearce. “However, the risks are skewed toward higher rates.”
While Trump and his allies have sought to pressure the Federal Reserve into cutting interest rates, the central bank’s top officials – led by its chair, Jerome Powell – have so far refused, as they wait to see the impact of his tariffs on the economy.
Minutes taken from the Fed’s latest rate-setting meeting, released on Wednesday, disclosed that only “a couple” of its officials said they felt interest rates could fall as soon as its next meeting, later this month.
“Most participants” at the Fed meeting – at which rates were kept on hold last month – anticipated rate cuts later this year, according to the minutes, with any price shock caused by Trump’s tariffs expected to be “temporary or modest”.
