Donald Trump’s new tariff regime deepens global trade war – Financial Times

Report on the Implementation of New US Tariffs and Their Implications for Sustainable Development Goals

A new United States tariff regime, implemented at 12:01 am on Thursday in Washington, marks a significant shift in global trade policy. This move, establishing the highest American import duties in a century, initiates a new era of trade rivalry that poses considerable challenges to the framework of the Sustainable Development Goals (SDGs).

Impact on Global Partnerships and Economic Stability

Undermining Global Partnerships for Sustainable Development (SDG 17)

The unilateral imposition of reciprocal levies on nearly all foreign countries represents a departure from the collaborative international trading system developed over decades. This action directly challenges the principles of SDG 17, which calls for strengthening global partnerships for sustainable development.

• Diplomatic efforts to mitigate the tariffs have been largely unsuccessful, as evidenced by the failed last-ditch attempt by Swiss President Karin Keller-Sutter to secure an exemption.
• The new regime creates what trade analysts describe as a “new trade order,” replacing cooperative frameworks with rivalry and complexity.
• Even economies with existing US trade deals, such as the European Union and Japan, are subject to increased levies, straining established economic partnerships.

Threats to Decent Work and Economic Growth (SDG 8)

The introduction of widespread tariffs threatens global economic stability and growth, key components of SDG 8. The complexity and scope of the levies create uncertainty and disrupt supply chains, potentially impacting employment and economic progress worldwide.

1. The new tariffs have been described by experts at the Peterson Institute for International Economics as “bonkers” in their complexity, creating significant operational challenges for international trade.
2. The policy affects major economic partners, including steep new levies on Canada, a partner in the North American trade agreement.
3. Future tariffs are anticipated for critical sectors such as pharmaceuticals and consumer electronics, which could further destabilize global markets and hinder economic growth.

Escalation of Inequality and Geopolitical Instability

Aggravating Inequalities Between Countries (SDG 10)

The tariff structure appears to disproportionately affect nations and could widen the gap between developed and developing economies, undermining progress toward SDG 10 (Reduced Inequalities).

• Switzerland, a developed nation, faces one of the highest tariff rates at 39%, impacting its key export sectors like pharmaceuticals and precious metals.
• Taiwan, a crucial exporter of semiconductor chips, failed in its efforts to reduce its tariff rate.
• Developing nations are also targeted, as demonstrated by the steepening of forthcoming tariffs on India.

Eroding Peace, Justice, and Strong Institutions (SDG 16)

The use of trade policy as a tool for geopolitical leverage undermines the rules-based international order and stable institutions central to SDG 16.

• The US administration has explicitly used tariffs to pursue geopolitical objectives, such as punishing India for its procurement of Russian oil.
• The president has threatened a 100% tariff on chip imports, linking potential exemptions to foreign investment in the US, thereby using trade policy to dictate national economic strategies.
• This approach signals a shift away from multilateral dispute resolution and toward unilateral actions, weakening the international institutions designed to maintain peace and economic stability.

Implementation Details and Economic Consequences

Tariff Regime Enforcement

The enforcement of the new tariff regime introduces immediate changes for global commerce.

1. The tariffs officially took effect at 12:01 am ET on Thursday.
2. Goods cleared through US customs after this time are subject to the higher rates.
3. A grace period exists for goods already in transit to the US before the deadline, provided they arrive by October 5. This exemption primarily benefits goods with longer shipping times, such as those from Asia, while goods arriving by air or truck from closer regions are immediately affected.

Initial data from Pantheon Macroeconomics indicates a significant increase in US customs and excise duty collection, rising to approximately $30 billion in July from a monthly average of about $8 billion in 2024, reflecting the economic impact of the administration’s broader trade strategy.

SDGs Addressed in the Article

• SDG 8: Decent Work and Economic Growth

  The article discusses major shifts in global trade policies, such as the imposition of high tariffs, which directly impact economic growth. The creation of a “new era of trade rivalry” and the disruption of the established “international trading system” affect economic stability, investment, and the overall economic performance of the US and its trading partners.

• SDG 10: Reduced Inequalities

  The article highlights how the new tariff regime affects countries unequally. Specific nations like Switzerland, Taiwan, India, and Canada are mentioned as being subject to steep new levies. The failure of diplomatic efforts by countries like Switzerland to negotiate lower rates (facing a 39% tariff) shows how these unilateral policies can create or worsen economic disparities between nations.

• SDG 17: Partnerships for the Goals

  This goal is central to the article’s theme. The text describes a move away from global partnerships and a rules-based multilateral trading system. The US’s unilateral implementation of “reciprocal levies on almost all foreign countries” and the breakdown of trade agreements and truces (e.g., with China) directly undermine the principles of international cooperation and partnership for sustainable development.

Specific SDG Targets Identified

• Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization.

  The article’s content is in direct opposition to this target. It describes the end of an “old order” and the “dawn of a new trade order” characterized by unilateral actions rather than a universal, rules-based system. The imposition of tariffs despite “frantic lobbying by foreign capitals” indicates a departure from a cooperative, multilateral approach to trade.

• Target 17.11: Significantly increase the exports of developing countries.

  The policies described in the article directly hinder this target. By imposing high tariffs on imports from various countries, including a threatened 100% tariff on chip imports and a 39% tariff on Swiss goods, the US is actively restricting access to its market. This action is designed to reduce imports, thereby negatively impacting the export volumes and revenues of its trading partners.

• Target 10.a: Implement the principle of special and differential treatment for developing and least developed countries, in accordance with World Trade Organization agreements.

  The article implies a violation of this principle. The US is applying “reciprocal levies on almost all foreign countries” and using trade policy to pursue geopolitical goals, such as steepening tariffs on India for buying Russian oil. This approach does not appear to consider special and differential treatment, instead applying punitive measures based on unilateral decisions.

Indicators Mentioned or Implied

• Indicator 17.10.1: Worldwide weighted tariff-average.

  The article provides specific data points that contribute to this indicator. It explicitly states that the new tariffs push “American import duties to their highest level in a century.” It also provides concrete examples of tariff rates, such as:

  1. A 39% tariff on Switzerland.
  2. A threatened 100% tariff on chip imports.
  3. A mention of a lower 10% tariff that was not granted to Switzerland.

  These figures are direct measures of tariffs being applied, which is the core of this indicator.

• Customs Revenue as a proxy indicator for trade friction.

  The article mentions a specific financial figure that serves as an indicator of the tariffs’ impact: “the US had collected about $30bn in customs and excise duties in July, up from about $8bn a month on average in 2024.” This sharp increase in duties collected is a direct quantitative measure of the financial barrier imposed on imported goods, reflecting a less open trading system.

Summary Table of SDGs, Targets, and Indicators

Source: ft.com