Trump’s Trade Ultimatum: Side with the U.S. or Face Tariffs
Trump threatens additional tariffs for countries aligning with BRICS.
- Trump vows extra 10% tariff on countries backing BRICS policies.
- New tariffs are set to take effect on August 1.
- The U.S. has trade deals with the UK, Vietnam, and a partial agreement with China.
The threat of tariffs is looming large: **What happens if countries side with BRICS?** Countries siding with BRICS policies against U.S. interests could face an additional 10% tariff, according to President Trump.
In a social media post, Trump declared, “Any country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% tariff. There will be no exceptions to this policy.” Trump has been a long-standing critic of BRICS, an organization that includes China, Russia, and India.
The August 1 Deadline
Originally, the U.S. had set a July 9 deadline for countries to agree to a trade deal. However, U.S. officials have pushed this back, stating that tariffs will now take effect on August 1. Trump announced that letters would be sent to countries, outlining the tariff rate they will face if an agreement isn’t reached.
Since assuming office in January, Trump has implemented a series of import tariffs, arguing they will stimulate American manufacturing and safeguard jobs.
In April, which he dubbed “Liberation Day,” Trump announced a wave of new taxes on goods from various countries, some as high as 50%. These plans were quickly suspended for three months of negotiations, ending July 9. During this period, the U.S. imposed a 10% tariff on goods from most of its international trading partners.
So far, the U.S. has successfully negotiated trade agreements with the UK and Vietnam, along with a partial deal with China.
However, a comprehensive deal regarding taxes on UK steel imported by the U.S. remains elusive. The U.S. also lacks a trade agreement with the European Union (EU), despite the fact that the European Commission’s president Ursula von der Leyen had a “good exchange” with Trump.
Trump’s Tariff Talk
When questioned about whether the taxes would change on July 9 or August 1, Trump stated, “They’re going to be tariffs, the tariffs are going to be tariffs,” over the weekend.
He added that between 10 and 15 letters would be sent to countries on Monday, advising them of their new tariff rates if they fail to agree to a deal. U.S. Commerce Secretary Howard Lutnick clarified that the taxes will be enforced on August 1.
Last week, Trump suggested that Japan could face tariffs of “30% or 35%” if they didn’t reach an agreement with the U.S. by Wednesday. In May, the EU was informed that it could face taxes of 50% without an agreement.
Reports suggest the EU is considering a provisional agreement to maintain a 10% tariff on most goods and is in discussions to reduce a 25% tariff on EU cars and parts, and a 50% tax on steel and aluminum sales to the U.S.
The Expansion of BRICS
Last year, the list of BRICS members expanded beyond Brazil, Russia, India, China, and South Africa to include Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates.
The bloc, designed to enhance the nations’ international standing and challenge the U.S. and western Europe, accounts for more than half of the world’s population.
In 2024, Trump threatened 100% tariffs on BRICS countries if they pursued their own currency to compete with the U.S. dollar.
Trump’s recent threat to countries collaborating with BRICS nations came after members criticized U.S. tariff policies and proposed reforms to the International Monetary Fund (IMF) and currency valuations.
Following a two-day meeting in Rio de Janeiro, BRICS finance ministers released a statement denouncing tariffs as a threat to the global economy, causing “uncertainty into international economic and trade activities.”
Andrew Wilson, deputy secretary general of the International Chambers of Commerce, noted the difficulties countries would face in moving away from doing business with China.
He stated that shifting away from China is “far more difficult to achieve in the world in practice,” citing China’s dominance in sectors like EVs, batteries, and rare earths, where “there are no viable alternatives to China production.”
US Trade Deals: A Snapshot
As of July 7, the White House has agreed to the following:
- A deal with the UK to cut tariffs on UK cars and parts from 27.5% to 10% up to a quota of 100,000 vehicles. Taxes on aerospace goods have been cut to zero. In return, the UK has agreed to remove import taxes on US ethanol and beef.
- A deal with Vietnam whereby Vietnamese goods shipped to America will be taxed at 20% and US products exported to Vietnam will face no tariffs. Any goods “trans-shipped” through Vietnam by another country that are sold into the US will be taxed at 40%.
- A partial deal whereby US taxes on some Chinese imports fell from 145% to 30% and China’s tariffs on some US goods were cut from 125% to 10%. China has also halted and scrapped other non-tariff countermeasures, such as the export of critical minerals to the US.
