US sweeping new 'reciprocal tariffs' spark global backlash

The US's sweeping new "reciprocal tariffs" on over 90 countries took effect at midnight on Thursday. ‪The new duties, ranging from 10 percent to 50 percent, have drawn wide criticism from the country's trading partners.

Brazil's government formally requested WTO consultations on Wednesday after the US imposed a 50 percent tariff on its exports—among the highest rates levied this month. President Luiz Inácio Lula da Silva condemned the measure as "unacceptable blackmail."

India faces a similar 50 percent tariff later this month unless a deal is reached. Prime Minister Narendra Modi struck a defiant note Thursday, declaring he would "not compromise farmers' interests" even at a heavy economic cost. 

Switzerland failed to avert a 39 percent US tariff after talks in Washington collapsed. Swiss businesses warned of a "horror scenario" for exporters, particularly in pharmaceuticals and machinery. The government said it would pursue further negotiations.

The European Union and Japan managed to secure exemptions by agreeing to concessions. The EU will invest $600 billion in the US and buy $750 billion in American energy. Japan, meanwhile, accepted a 15 percent auto tariff while pledging $550 billion in US investments and increased rice imports.

China-US talks in Stockholm last month agreed to push for the extension of a 90‑day tariff pause. China's July exports surged 8 percent year-on-year, outperforming expectations and underscoring its trade resilience. 

IMF warns of long-term damage to the global economy

The International Monetary Fund (IMF) warned on July 22 that the US's widespread tariffs on trading partners could have "significant macroeconomic effects." The measures may reduce global demand, create supply shocks, and fuel inflation through higher import prices.

The IMF also cautioned that tariff uncertainty could weaken business and consumer confidence while increasing financial market volatility. Worse, retaliatory trade barriers by other nations may deepen geo-economic fragmentation, causing long-term harm to the global economy.

The economic toll is already becoming visible in the US. According to Yale University's Budget Lab, the US average effective tariff rate has surged to 18.3 percent as of July, the highest level since 1934. The analysis projects that these levies will cost the average American household an additional $2,400 per year due to higher prices on imported goods.

He Weiwen, a senior fellow at the Center for China and Globalization, argued that the US is inadvertently pushing other nations to forge stronger trade ties without American participation.