Welcome back to World Brief, where we’re looking at a looming deadline for sweeping U.S. tariffs, escalating anti-government protests in India, and new efforts to tackle Britain’s cost-of-living crisis.
Canada, Mexico, Brazil—and the World
U.S. Trade Representative Jamieson Greer warned on Tuesday that the Trump administration was poised to issue another round of tariffs, just days before sweeping U.S. duties are set to expire. “I can’t really specify a timeline right now,” Greer told CNBC. “But we do expect action soon.”
Welcome back to World Brief, where we’re looking at a looming deadline for sweeping U.S. tariffs, escalating anti-government protests in India, and new efforts to tackle Britain’s cost-of-living crisis.
Canada, Mexico, Brazil—and the World
U.S. Trade Representative Jamieson Greer warned on Tuesday that the Trump administration was poised to issue another round of tariffs, just days before sweeping U.S. duties are set to expire. “I can’t really specify a timeline right now,” Greer told CNBC. “But we do expect action soon.”
Mere hours after the U.S. Supreme Court struck down President Donald Trump’s sweeping tariffs in February, which had relied on the 1977 International Emergency Economic Powers Act, the White House imposed 10 percent global levies under a different authority: Section 122 of the 1974 Trade Act. But those duties were time-limited, and unless Congress intervenes to extend them, which it is unlikely to do, they will lapse at 12:01 a.m. EDT on Friday.
Although Greer did not say what the new levies would entail, analysts predict that they will likely be tariffs of up to 12.5 percent that the Office of the U.S. Trade Representative proposed in early June. These duties would affect 60 economies that Greer claims have failed to prevent forced labor, thereby covering “about 99 percent of our trade.”
Much as with Trump’s previous global tariffs, this new round “will surely face legal challenges and may be overturned,” FP trade reporter Keith Johnson told World Brief. “But that will take months, if at all.”
The Trump administration’s protectionist measures aren’t ending there. On Monday, the White House announced 50 percent duties on nearly $20 billion worth of Canadian goods, effective Aug. 19. Washington cited Ottawa’s recent retaliatory tariffs on U.S. steel, aluminum, liquor, dairy, and autos as the reason for this new tax.
Launched under Section 338 of the 1930 Tariff Act, the new levies will impact goods that were previously protected by the United States-Mexico-Canada Agreement (USMCA). Trump decided not to extend that deal this month, triggering yearly reviews of the agreement going forward and paving the way for renegotiations among the three countries. USMCA oversees nearly $1.6 trillion in annual trade. Last year, the U.S. trade deficit with Mexico grew 17 percent to $197 billion, while its trade gap with Canada fell 21 percent to $48.3 billion, according to the U.S. Census Bureau.
The new tariffs are likely to deepen the U.S.-Canada rift that has kept Ottawa mostly sidelined from the USMCA renegotiation talks so far, a third round of which kicked off in Mexico City on Tuesday without Canada. This week’s three-day meeting is expected to focus on revising the deal to lower the U.S. trade deficit, boost manufacturing in the United States, and prevent China and other Asian markets from using Mexico (and Canada) to access U.S. goods on preferential terms.
Mexico City appears optimistic that it can secure a new trade deal with Washington by the end of this year. “Every moment that we’re losing, I think we are losing competitiveness, market share, and investment, so it’s in the best interest of all three of us to get to a position of resolution soon,” said Roberto Lazzeri, Mexico’s ambassador to the United States.
Greer has previously applauded Mexico for its “pragmatic” approach to negotiations and its lack of retaliatory measures, in a thinly veiled condemnation of Canada’s actions. However, Canadian Prime Minister Mark Carney said he had spoken to Trump on Tuesday following the previous day’s tariff announcement and that the two leaders agreed to ramp up trade talks between their countries in the coming weeks.
Trump’s trade ire is not isolated to North America, though. On Wednesday, a new 25 percent U.S. tariff on Brazilian goods will go into effect. These duties will apply to thousands of Brazilian products, including ethanol, and are expected to impact roughly $10 billion worth of trade (or around one-fifth of Brazil’s total exports to the United States).
Today’s Most Read
What We’re Following
Escalating protests. India’s ruling Bharatiya Janata Party (BJP) vowed on Tuesday to establish a foolproof public examination system following May’s damaging test questions leak, which forced millions of medical school applicants to retake one of the world’s toughest entrance exams. New Delhi also vowed to punish those responsible, though it stopped short of dismissing Education Minister Dharmendra Pradhan—a key demand of the youth-led Cockroach movement.
The movement, which calls itself the Cockroach Janta Party (CJP) in a mocking reference to the BJP, emerged in May after Supreme Court Chief Justice Surya Kant compared unemployed young people to “cockroaches.” It quickly gained popularity following repeated allegations of exam leaks. Unrest escalated over the weekend when authorities forcibly removed activist Sonam Wangchuk, who was on a hunger strike, and it further worsened on Monday after police used tear gas and batons to dispel what CJP leaders said were “peaceful protesters.”
Several high-ranking opposition lawmakers, including Indian National Congress leader Rahul Gandhi, have since joined the demonstrators, with dozens of parliamentarians joining a sit-in outside Prime Minister Narendra Modi’s home on Tuesday. They were ultimately detained, though Gandhi reportedly laid down in the middle of the road to resist police attempts to remove him. Meanwhile, the CJP has vowed to continue protesting, but it said on Tuesday that it would not march on Parliament out of fear of another brutal crackdown.
Big tax cuts. British Prime Minister Andy Burnham used his first full day in office on Tuesday to announce a major tax cut aimed at easing high costs of living. Starting Oct. 1, the United Kingdom will slash a 5 percent sales tax on domestic electricity bills, cutting around $60 from households’ average annual bills. To compensate for the lost funding, London will pull savings from the recent cancellation of a $2.42 billion digital identification program.
“We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets, and bring back hope,” Burnham said, vowing to give residents more “breathing space” in their lives. John Healey, the newly appointed chancellor of the Exchequer, reiterated Burnham’s emphasis on fiscal reform. “We need to look hard at our own budgets,” Healey said, to “allow us to do more to relieve the cost of making life just a bit more affordable for people in the future.”
High energy bills exacerbated by the Russia-Ukraine and Iran wars have been one of the main drivers of the U.K. cost-of-living crisis. Yet Downing Street has recognized that reducing electricity bills won’t singlehandedly solve the issue. Burnham and Healey have promised to impose other measures, such as capping bus fares and investing an extra $457 million to tackle homelessness.
How to handle Hezbollah. Trump reiterated U.S. support for Beirut on Tuesday while hosting Lebanese President Joseph Aoun in Washington. Lebanon has been “a very badly treated place and country, and we’re going to have it properly treated and treated with the respect it deserves,” Trump told Aoun, who was the first Lebanese head of state to visit the White House since 2009.
In recent months, the United States has mediated several rounds of peace talks between Lebanese and Israeli officials. Beirut wants Israeli forces to withdraw from Lebanese territory, but Israel refuses to fully leave until Lebanon disarms Hezbollah, an Iranian-backed militant group in the country. But the Lebanese government does not speak for Hezbollah, the militant group has not participated in the U.S.-led negotiations, and its members refuse to recognize the Israel-Lebanon framework signed on June 26.
Yet Aoun remains committed to the deal. Hours before his White House visit, Lebanese troops began taking control of territory in southern Lebanon that was previously held by Israel. Beirut hopes that this operation, which is part of a “pilot zone” plan established as part of the deal, will allow Lebanon to begin confiscating Hezbollah’s weapons, enabling Israel to begin a phased withdrawal. However, reports of Israeli forces firing near Lebanese soldiers have already raised doubts that the pilot program will hold.
Odds and Ends
Just hours after leaving a tumultuous term at Downing Street on Monday, former Prime Minister Keir Starmer was spotted at a pub in north London. According to local media, Starmer enjoyed a bitters alongside former Chancellor of the Exchequer Rachel Reeves, who had chosen a glass of white wine to mark her last day in office. It is unclear whether the two were celebrating their accomplishments or lamenting the end of their terms, though Starmer had said in his farewell address, “I go with a smile, and I go proud of everything that we have achieved.”
FP’s World Brief writer likes to think that the two were toasting their final day with Larry the Cat, who is perhaps the most beloved resident of Downing Street. Larry has spent the past 15 years at No. 10, where he has served as chief mouser to the Cabinet Office. It is unclear what Larry thinks of his new roommate, Burnham.
