ASX 200 falls as US finalises tariffs set to begin next week

The newly finalised US reciprocal tariffs will come into effect on 7 August.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) is trading 0.76% lower on Friday after the US finalised its list of global reciprocal tariffs overnight.

The United States issued an Executive Order overnight detailing revised reciprocal tariffs for scores of nations.

The Order also sets a date for the revised tariffs to begin, which is next Thursday, 7 August.

A financial expert or broker looks worried as he checks out a graph showing market volatility.

Image source: Getty Images

ASX 200 drops on Friday

The revised tariffs follow several trading deals negotiated between US President Donald Trump and these nations' governments.

One of the biggest deals involves a $550 billion investment into the US by Japan in exchange for a tariff reduction from 24% to 15%.

However, the Order notes that some nations have offered unacceptable terms and, therefore, no adjusted tariff would apply to them.

The details of the Order leave room for new deals to be made if these nations step up to the plate.

Any nation not appearing on this revised list, including Australia, will be subject to the current 10% baseline tariff.

The exception is China, with the negotiated 34% tariff (reduced from 125% in May) to stand.

This is a relief for companies manufacturing goods in Australia, given President Trump had considered raising the baseline tariff to 15% or 20%.

However, the manufacturing sector in Australia is comparatively small.

Many ASX 200 companies manufacture goods in other countries, particularly in Southeast Asia.

So, they'll be more interested to see how US tariff rates have changed in those nations.

Several large manufacturing nations receive US tariff relief

Several nations with strong global manufacturing industries have secured lower tariffs.

These include Taiwan, which now has a US tariff of 20%, down from 32%. The US has reduced Vietnam's tariff from 46% to 20%.

South Korea's tariff has been reduced from 25% to 15%. Indonesia's tariff has been lowered from 32% to 19%.

The US tariff for goods from Bangladesh has been reduced from 37% to 20%. Thailand's tariff is down from 36% to 19%.

Sri Lanka's tariffs are down from 44% to 20%.

Some of the countries with the most punishing original reciprocal tariffs are now subject to much lower rates.

Examples include Cambodia, down from 49% to 19%; Guyana, down from 38% to 15%; Lesotho, down from 50% to 15%; and Madagascar, down from 47% to 15%.

Some nations have received higher tariffs, such as the Philippines at 19%, up from 17%.

Here is the revised list of US tariffs. You can compare it to the original reciprocal tariffs list here.

Complete list of revised US tariffs

Country or territoryUS tariff
Afghanistan15%
Algeria30%
Angola15%
Bangladesh20%
Bolivia15%
Bosnia and Herzegovina30%
Botswana15%
Brazil10%
Brunei25%
Cambodia19%
Cameroon15%
Chad15%
Costa Rica15%
Côte d`Ivoire15%
Democratic Republic of the Congo15%
Ecuador15%
Equatorial Guinea15%
European Union: Goods with Column 1 Duty Rate[1] > 15%0%
European Union: Goods with Column 1 Duty Rate < 15%15% minus Column 1 Duty Rate
Falkland Islands10%
Fiji15%
Ghana15%
Guyana15%
Iceland15%
India25%
Indonesia19%
Iraq35%
Israel15%
Japan15%
Jordan15%
Kazakhstan25%
Laos40%
Lesotho15%
Libya30%
Liechtenstein15%
Madagascar15%
Malawi15%
Malaysia19%
Mauritius15%
Moldova25%
Mozambique15%
Myanmar (Burma)40%
Namibia15%
Nauru15%
New Zealand15%
Nicaragua18%
Nigeria15%
North Macedonia15%
Norway15%
Pakistan19%
Papua New Guinea15%
Philippines19%
Serbia35%
South Africa30%
South Korea15%
Sri Lanka20%
Switzerland39%
Syria41%
Taiwan20%
Thailand19%
Trinidad and Tobago15%
Tunisia25%
Turkey15%
Uganda15%
United Kingdom10%
Vanuatu15%
Venezuela15%
Vietnam20%
Zambia15%
Zimbabwe15%

Other US tariff news

Also this week, the US ended the de minimis exemption on goods manufactured in all nations outside the US, effective 29 August.

The de minimis exemption allowed goods with a dutiable value under US$800 to be imported into the US duty-free.

In May, President Trump ended the exemption for low-value goods from China and Hong Kong. Now, it applies to all nations.

This is bad news for many ASX 200 retail companies.

Cettire Ltd (ASX: CTT) shares hit a record low of 25 cents yesterday following the news.

A company update stated that shipments to the US represented approximately 40% of Cettire's gross revenues in May and June, and "the majority of sales" fell under the de minimis price threshold.

Cettire was previously a darling of the ASX 200 retail sector but has suffered a fall from grace over the past 17 months.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Business people discussing project on digital tablet.
Broker Notes

Buy, hold, sell: Mesoblast, Mineral Resources, and Woolworths shares

Analysts have given their verdict on these shares. Let's see what they are saying.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Broker Notes

These top ASX 200 shares could rise 30% to 40%

Analysts are predicting big things from these shares. Let's find out why.

Read more »

Stacks of coins in a row with each higher than the last, and a person standing on top of each one watching them grow.
Dividend Investing

How I'd invest $2,000 in high-yield ASX 300 shares

I rate these businesses as strong buys for the long-term.

Read more »

A rueful woman tucks into a sweet pie as she contemplates a decision with regret.
Share Fallers

The worst 4 ASX 200 stocks to buy and hold in April unmasked

Investors sent these four ASX 200 stocks tumbling 21% to 44% in April.

Read more »

A man sitting at a computer is blown away by what he's seeing on the screen, hair and tie whooshing back as he screams argh in panic.
Share Fallers

Why these top ASX shares sank 10%+ in April

It was a tough month for these popular shares.

Read more »

A man in his office leans back in his chair with his hands behind his head looking out his window at the city, sitting back and relaxed, confident in his ASX share investments for the long term.
Broker Notes

Buy, hold, sell: Netwealth, PLS, and Reliance shares

Morgans has given its verdict on these shares. Let's see what the broker is saying.

Read more »

Two smiling men in high visibility vests and yellow hardhats stand side by side with a large mound of earth and mining equipment behind them smiling as the Carnaby Resources share price rises today
Share Market News

Buy, hold, sell: Capricorn Metals, PLS Group, Fortescue shares

Bell Potter has reviewed its ratings and 12-month price targets on three ASX 200 mining shares.

Read more »

A group of young people celebrate and party outside.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors finally caught a break this Friday.

Read more »