US: Something new on the tariffs front – Commerzbank

The tariffs imposed by US President Trump are set to take effect today. However, there is now new information about countries that have not yet reached an agreement with the US, Commerzbank's FX analyst Antje Praefcke notes.

Tariff dispute may weigh on the affected currencies

"Globally, a tariff of at least 10% will apply, while countries with a trade surplus with the US will face at least 15%. For almost all of the US's trading partners, this means higher tariffs, which are set to come into effect on August 7. In some cases, tariffs for certain countries will rise to as much as 41%, with special tariffs for certain sectors (pharmaceuticals, semiconductors etc.) to be announced in the coming weeks."

"Some countries will be hit particularly hard, such as Canada, with 35% for goods not covered by the USMCA agreement. Switzerland will also be subject to 39%, and South Africa to 30%. Norway, on the other hand, seems to have got away relatively well with 15%, as have most Asian countries. Trump is thus increasing the pressure on countries to conclude an agreement."

"The currencies of the countries heavily affected could come under downward pressure today in light of this news. It remains to be seen how the tariff dispute will continue and how inflation in the US will develop as a result of the tariffs. With this news, one thing is clear: the issue will continue to occupy us for a long time to come, and surprises are to be expected at any time."