Trump Raises Tariffs on Canada and Brazil, Reduces Rates for Other Nations

President Donald Trump has reinstated his global tariff strategy, increasing duties for key trade partners like Canada and Brazil while lowering them for several other nations. According to The Spirits Business, Canada now faces a 35% tariff, while Brazil absorbs one of the steepest hikes at 50%. In contrast, the United States halved the EU’s tariff to 15% after reaching a new trade deal.

Adjustments for Other Markets

Trump’s latest executive order details tariff rates for more than 90 countries. Some have gained relief since his initial plan in April. For instance:

• Japan: reduced from 24% to 15%
• Lesotho: dropped from 50% to 15%
• India: eased slightly from 26% to 25%
• South Korea: lowered from 25% to 15%, a positive shift for the country’s soju exporters

Meanwhile, the UK maintains its baseline 10% rate. These changes will take effect on August 7.

Canada Faces Higher Duties but Spirits Stay Exempt

Canada’s tariff hike took effect immediately on August 1, moving from 25% to 35%. The White House cited Canada’s alleged failure to curb fentanyl trafficking and retaliation against previous US trade actions. Goods qualifying under the US-Mexico-Canada Agreement (USMCA) remain exempt, including Bourbon, Tequila, and Canadian whisky, as long as they meet rules of origin.

However, prior US tariffs led Canadian liquor stores to pull American-made spirits, causing US spirits sales in Canada to plunge by 66%. Canadian Prime Minister Mark Carney expressed disappointment, stating on X that “most Canadian exports remain tariff-free” and reaffirming the government’s focus on strengthening the domestic economy.

Carney emphasized that Canada will invest in “major nation-building projects” with provincial, territorial, and Indigenous partners, aiming to generate over half a trillion dollars in new investments and create more Canadian jobs.

Brazil Tariff Surge Signals Growing Political Rift

Brazil’s tariff jump from 10% to 50% reflects escalating tensions between Washington and Brasília. The executive order labeled the situation a “national emergency” tied to Brazilian government actions allegedly harming US companies, free speech rights, and the US economy. Tensions have intensified due to Trump’s public support for former Brazilian president Jair Bolsonaro, who now faces trial over an alleged coup.

Mexico and China Negotiations Continue

Mexican President Claudia Sheinbaum confirmed that the US extended its tariff pause for Mexico by 90 days, with talks scheduled to follow. The proposed rate was 30%, the same initially threatened to the EU before it negotiated down to 15%.

China remains in ongoing negotiations with Washington. While excluded from the current order, China previously faced a proposed 125% tariff under Trump’s trade plan.

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Source of information

The Spirits Business Article — Trump hikes tariffs for Canada and Brazil, written by Lauren Bowes

The image of the article is courtesy of © Veronaa and © Daboost and via Canva.com