The rate announcement of the US Government 2 April (later paused for 90 days) is part of a broader strategy aimed at forcing foreign governments to reduce trade barriers for American goods.In addition to traditional rates, the policy focuses on the target-Tariff barriers such as agricultural regulations, tax systems, currency practices, product standards, legal frameworks and customs procedures.
Countries have received a deadline of three months to make concessions or make new rates from 10 percent to more than 50 percent. Rates for Chinese goods have already been taken into effect.
However, many countries face major challenges in complying with American requirements, especially when reducing rates and navigating ambiguous negotiation conditions. Civil servants from different targeted countries have expressed uncertainty about the specific requirements of the administration.
The American vice president JD Vance confirmed that India has agreed to start trade discussions, while other countries are still trying to define the negotiating framework. Analysts, quoted by the Associated Press, suggest that the goals of the administration are versatile to not only generate income and to breathe new life into American production, but also to open foreign markets and reform international tax and regulatory systems.
Most important areas of non-tariff focus:
Currency rates
US President Trump has accused countries such as Germany, China and Japan of “worldwide freela weighing” by reporting their currencies to make exports cheaper. Although the rate reductions of the European Central Bank can weaken the euro, the cautious rate increases of the Bank of Japan will be expected to strengthen the yen. The US dollar has already fallen from 160 to about 140 yen, and analyst Shrikant Bale predicts a further decrease to 120 yen.
Agricultural barriers
American agricultural exports are confronted with resistance due to food safety and household protection. Japan limits American rice and potatoes, forbids Europe treated with hormone treated beef and chicken with chlorine crops, and Korea maintains age -based limitations on the import of beef coupled with worries in the past around beef sponge encephalopathy or crazy cow disease.
For example, US potato growers have long aimed at the estimated $ 150 million market in Japan. Despite long -term discussions, Japan has delayed progress, referring to the concern of the regulations. “It’s pure politics,” said Kam Quarles, CEO of the National Potato Council. “If Japanese politicians see Trump’s rates as more painful than domestic pushback, a deal is more likely.”
In Korea, lifting beef restrictions remains politically sensitive. “It is still controversial because of the return of 2008. The government will be careful,” said commercial law expert Jaemin Lee.
Load systems
The Trump administration has criticized the widespread use of tax (VAT) systems with added value (VAT), with the argument that they seam the export of the US. However, economists claim that VAT is trading neutral. More than 170 countries use VAT, in contrast to the fragmented sales tax model of the US.
A potential increase in rates can affect European countries, where rates for taxes (VAT) of the added value of 20 percent are based on product categories and other 170-plus countries that use comparable tax methods. The United States are unique in its approach, which states VAT in favor of state -specific sales tax.
It is unlikely that Nations will change their tax frameworks to accommodate Trump’s position. The European Union has explicitly stated that VAT does not remain negotiable.
Product standards
The rules for car safety regulations of Japan and subsidy for electric vehicles are marked as obstacles for American exports. Similar regulatory obstacles exist in the pharmaceutical and automotive sector of Korea.
Bureaucratic procedures
Dealous import processes in countries such as Japan and Korea hinders American exports of seafood, grains and goods produced. Delays and bureaucracy have become important trade frictions.
“Buy American”
In essence, the agenda of the administration seems to give priority to reducing trade shortages by stimulating the US exports and changing production at home. Some analysts wonder whether non-rate worries are real policy goals or just justifications for rates.
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