There Global Trade Turmoil? US tariff turmoil sparks worldwide reaction

We’re only 19 days into August, and already there’s been a tidal wave of international trade news. Major policy shifts, rising geopolitical tensions, and unexpected alliances have taken centre stage so here’s what’s going on. 

In a bold move shaking the foundations of global commerce, former US President Donald Trump signed an executive order on August 1st, imposing steep new tariffs on 66 countries. These include key US allies such as Canada, the EU, Taiwan and South Korea. However, Canada appears to have escaped the worst of it for now most goods won’t be affected, as long as they fall under the current US–Canada agreement. 

Tariff rates are ranging anywhere from 13% to 41%, with some countries being hit even harder. Brazil, for example, faces a 50% levy. India has been dealt a flat 25% tariff with no exemptions, likely due to its continued purchases of Russian oil. These tariffs officially came into effect on August 7th. 

Outside the US, the global response has been swift. South Africa is looking to diversify its trade ties by strengthening connections with countries like India and China. Meanwhile, the EU has announced a €4.7 billion investment into South Africa, aimed at boosting green energy projects and vaccine production — a move that looks like a clear attempt to deepen economic ties in the region. 

So, what does all of this mean for the UK? 

There’s both opportunity and risk. The UK could look to strengthen existing free trade agreements, such as the recently signed deal with India, and explore expanding its position within the CPTPP. With many nations now re-evaluating their dependency on the US, there’s potential for the UK to step in and offer more stable alternatives in key sectors like manufacturing, pharmaceuticals and clean energy. 

However, there’s also reason for caution. Any continued trade with countries currently targeted by the US such as Russia, Iran or even China could open the UK up to retaliatory tariffs or secondary sanctions. In addition, rising geopolitical tensions, particularly around the Strait of Hormuz, could disrupt global shipping routes and drive-up freight and fuel costs further complicating international supply chains. 

In short, global trade is entering another turbulent chapter. For UK exporters, this is a moment to stay sharp, make strategic choices, and ensure their markets and partners are as future-proof as possible.