Trump's tariffs are coming in many forms, and trading partners are worried that there are still big pitfalls ahead!

The Trump administration's tariff negotiations with many countries have encountered obstacles. Trading partners such as Japan, India, and the European Union have refused to sign trade agreements when they are not sure whether they will be subject to additional industry tariffs.

The U.S. Department of Commerce is expected to announce the results of its investigation into industries such as semiconductors, pharmaceuticals, and key minerals in a few weeks. It is widely predicted that the U.S. authorities will use this to invoke Section 232 of the Trade Expansion Act to impose tariffs on related foreign products.

Trump's reciprocal tariffs on many countries will resume on July 9. Countries are seeking to reach an agreement with the United States before this deadline, but the problem is that they still know nothing about the situation of industry tariffs. For many countries, industry tariffs may be more lethal than reciprocal tariffs with a wider range of applications.

Deborah Elms, director of trade policy at the Hinrich Foundation, said, "Imagine you are Vietnam, Japan or South Korea, and you just agreed to a painful compromise on reciprocal tariffs today, and then they impose new Section 232 tariffs on you the next day."

The "incomplete" trade agreement reached between the United Kingdom and the United States is a revelation to many countries. The agreement leaves key details of steel trade to subsequent negotiations, including a quota system and stricter rules of origin. At the same time, Trump's 25% tariff on British steel remains unchanged, falling short of the British government's desired zero tariff target.

Wendy Cutler, former senior US trade negotiator and vice president of the Asia Society Policy Institute, said, "It is not clear how these tariffs will affect each other, which is a major concern for our trading partners."

A White House official said that the framework of the UK-US trade agreement shows that the United States has some room for maneuver on industry tariffs, but other countries should not regard it as a model. The Section 232 tariffs are aimed at promoting the return of national security-related products to the United States for manufacturing, which is different from the purpose of the reciprocal tariffs announced on April 2.

The Trump administration sometimes uses tariffs or the threat of tariffs as bargaining chips, a practice that many countries find difficult to understand.

U.S. Commerce Secretary Howard Lutnick gave an example of how Section 232 tariffs can be used to promote business transactions when testifying in the Senate earlier this month. In the UK-U.S. agreement, the United States does not impose tariffs on British aviation products, which are within the scope of the Section 232 investigation.

Lutnick said that in exchange for zero tariffs, British airlines agreed to buy $10 billion worth of Boeing aircraft.

Make a deal

"As long as other countries cooperate, we expect to propose preferential plans similar to those conditioned on the purchase of American aircraft," Lutnick added.

For the European Union, which has been severely affected by the 25% automobile tariff and the 50% steel tariff, people familiar with the matter revealed that the progress of industry tariff negotiations is limited and it is expected that it will be difficult to reach a solution before July 9.

It is reported that the EU believes that the best solution for the current US-EU negotiations is to reach a principled agreement to lay the foundation for subsequent consultations.

Japan prefers to resolve all potential tariff issues at once, covering automobiles, auto parts, metals and reciprocal tariffs. But the 25% U.S. tariff on Japanese cars and auto parts has become a difficult point in the negotiations.

The U.S. focuses on the auto industry because it accounts for most of its trade deficit with Japan. But Tokyo sees the auto industry as a pillar of the economy, with 8.3% of the country's jobs coming from the industry and contributing about 10% of GDP.

"For Japan, cars are a real national interest. We will protect them at all costs," Japanese Prime Minister Shigeru Ishiba said in Canada earlier this month.

Ryosuke Akazawa, Ishiba's designated chief negotiator, said the negotiations will not be bound by the July 9 tariff deadline, and he expects the agreement with the United States to exempt Japan from high auto tariffs, even though Trump may raise tariffs on other countries.

India

People familiar with the matter said India is reluctant to sign a trade agreement with the United States without covering industries and reciprocal tariffs, and the Indian side is very determined.

Indian officials want Washington to make a commitment that the agreement reached between the two sides must be the most favorable agreement currently negotiated by the United States with other countries.