Nations Grow Restless Waiting for Trump’s Tariff Rollbacks
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U.K. Prime Minister Keir Starmer declared at a Jaguar Land Rover factory in May that his world-leading trade deal with President Donald Trump included a cut in U.S. tariffs on British steel to zero.
More than three months later, steel lobbyist Peter Brennan was still waiting for that relief to become reality.
Brennan, director of trade and economic policy at industry body U.K. Steel, said most members had seen U.S. orders fall because of the uncertainty over America’s 25% import tax. One producer that makes particularly price-competitive products said they’d be out of business by year-end if tariffs aren’t reduced to zero, he added.
“Concern is growing that finalizing the deal on steel has fallen down the priority list both for the U.K. and U.S. governments,” Brennan said last week. “The will to close the deal may well be faltering on both sides.”
Prime Minister Keir Starmer reached an agreement with U.S. President Donald Trump on June 16 to implementtrading terms disclosed last monthto slash U.S. tariffs on key British exports and raise U.K. quotas on certain American agricultural products. (Suzanne Plunkett/Getty Images)
Frustration and economic losses like those in the U.K. are growing in Japan, the European Union and South Korea. Those three made similar announcements over the past month: that Washington granted them leniency on auto exports in the haggling over the level of Trump’s across-the-board tariffs that took effect Aug. 7.
But for the trio of car export powerhouses, which unlike the U.K. face a 50% duty on their steel and aluminum, the wait for Trump’s concession continues while an American levy justified on national security grounds on imported Toyotas, BMWs, Hyundais and others remains at a crippling 25%.
“We’re continuing to see damage — the bleeding hasn’t stopped,” Japan’s chief trade negotiator Ryosei Akazawa said Aug. 15 in a reference to the country’s car industry. “We want the U.S. to sign the executive order as soon as possible.”
Spokesmen for the White House, the U.S. Trade Representative’s office and the Commerce Department didn’t reply to requests for comment.
‘Forever Negotiations’
It was three weeks ago that EU Commission President Ursula von der Leyen shook hands with Trump in Scotland over what she called an “all-inclusive” tariff of 15% that officials in Brussels later understood to be a ceiling that would also apply to cars.
VDA, which represents Germany’s car industry, is pressing for fast implementation to alleviate a “considerable burden” on manufacturers and their suppliers.
President Donald Trump and European Commission President Ursula von der Leyen shake hands after reaching a trade deal at the Trump Turnberry golf course in Scotland on July 27. (Jacquelyn Martin/AP)
“The deal between the EU and the U.S. has not yet brought any clarity or improvement for the German automotive industry,” VDA President Hildegard Müller said in a statement to Bloomberg News on Aug. 14. “The costs incurred run into the billions and continue to rise.”
Cecilia Malmström, the former European commissioner for trade who’s now a nonresident fellow at the Peterson Institute for International Economics, cautioned that any delays may be purely administrative.
But “if nothing happens, there will be huge pressure on the European Commission to retaliate or to act in some way, especially from carmakers in Germany, Italy, France, Sweden and others,” she said. “There are so many other things that are vague in the EU-U.S. deal — and in the others as well — so it is likely we will see forever negotiations and a lot of filibustering.”
At a press briefing on Aug. 14, European Commission spokesperson Olof Gill said Washington and Brussels are finalizing a joint statement. “The U.S. has made political commitments to us in this respect and we look forward to them being implemented,” he said.
Japan’s Uncertainty
Less than a week before the EU’s announcement, the U.S. and Japan clinched a surprise deal on July 22 that lowered across-the-board tariffs and car levies to 15%. So far the broader duties have been implemented but the added tax on autos remains at 25%.
President Trump announces MASSIVE trade deal with Japan 🇺🇸🇯🇵
"This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan." - President Donald J. Trump — The White House (@WhiteHouse)
Officials in Asia’s No. 2 economy are waiting for an executive order from Trump to bring down the car levies, as well as an official directive — like the EU already received — to clarify that the universal tariffs don’t stack on top of existing duties.
Akazawa has mentioned how a Japanese carmaker is losing 100 million yen ($680,000) every hour due to the tariffs.
Last month Nissan Motor Corp. said it foresaw a 300 billion yen hit from the lower tariff rate, down from a previous estimate of 450 billion yen. But CEO Ivan Espinosa has warned of the difficulties in giving an accurate forecast as long as it’s unclear when the tariffs will take effect and in what way.
Akazawa flew to the U.S. earlier this month to confirm that the U.S. will be adjusting its executive order soon to remove the stacking, and pay back overcharges on tariffs. Neither has yet to materialize.
Hyundai, Kia
Facing similar questions is South Korea, which announced a trade agreement with Washington on July 31. That pact would impose a 15% tariff on imports to the U.S., including autos, alongside a $350 billion Korean investment pledge focused on shipbuilding, and $100 billion in energy purchases.
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The 15% universal tariff took effect earlier this month under Trump’s order, but like Japan, the sectoral auto tariff remains at 25%. While South Korea’s exports overall have stayed resilient in the first half of the year, thanks to front-loading by companies anticipating higher U.S. tariffs, the value of car shipments to the U.S. fell nearly 17%, and steel exports dropped more than 11%, trade data showed.
South Korea’s top automaker Hyundai Motor Co. and affiliate Kia Corp. could face as much as $5 billion in additional costs this year even under the new 15% auto tariff, according to Bloomberg Intelligence analyst Joanna Chen. While avoiding a 25% levy will save more than $3 billion, the duty squeezes margins amid softer demand and tighter subsidies, intensifying competition with Japanese automakers, Chen said.
South Korean President Lee Jae Myung’s planned summit with Trump on Aug. 25 — their first meeting since Lee took office in June — will test the durability of the $350 billion investment pledge, as well as their alliance over sensitive issues like defense spending, U.S. troop levels and North Korea policy.
‘Just Overwhelmed’
For Starmer and the U.K., most aspects of the pact have now come into force, including a 10% so-called reciprocal rate that’s the lowest among all U.S. trading partners. Yet Trump’s 25% tax on British steel still chafes amid the delays in cutting it.
Among the issues to resolve is the U.S.’s insistence that steel should be melted and poured in the U.K. in order to qualify. That’s a requirement which Tata Steel U.K., one of the country’s biggest producers, is no longer able to fulfill after closing down its blast furnace last year. Its new electric arc furnace is not due to be ready until late 2027.
People familiar with the government’s thinking are cautiously optimistic they might be able to secure exemptions to the melt-and-pour rule, whereby steel imported from certain European countries before being further processed in the U.K. is allowed to qualify as British.
“It’s not for lack of trying by the U.K. government,” said Tim Rutter, director of public affairs at Tata Steel. “We hear that U.S. departments are just overwhelmed.”
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A spokesperson for the U.K. Department for Business and Trade said officials will continue to work with Washington to implement the deal as soon as possible.
Late on Aug. 15 in Washington, the U.S. Customs and Border Protection agency issued new inclusions to steel and aluminum product lists for tariffs that take effect Aug. 18, with some of the guidance affecting imports from the U.K.
Japan’s Akazawa acknowledged that even with the U.K., actual implementation of key parts of their deal took 54 days. As a result, he’s said that it’s “not bad” if an executive order from the U.S. comes by around mid-September.
“It’s just further confirmation that negotiations never really end,” especially with more U.S. tariffs coming for sectors including pharmaceuticals and semiconductors, said Sam Lowe, a partner at Flint Global in London and head of its trade and market access practice.
Written by Lucy White, Yuko Takeo and Heesu Lee
