US President Donald Trump's aggressive and sweeping tariff policies have roiled global financial markets and significantly heightened economic uncertainty, with tensions mounting ahead of a critical July 9 deadline for higher duties to take effect. These policies, which began in his second term with a 10 percent global tariff on most US trading partners in April, are set to escalate, with rates for many economies, including the European Union and Japan, potentially rising to between 11 percent and 50 percent.

China has borne the brunt of Trump's levies, with the world's two largest economies engaging in an escalating tariff war that, at one point, saw triple-digit tariffs on each other's goods, akin to a trade embargo. While temporary pullbacks have occurred, the US still maintains a 30 percent tariff on Chinese goods, which includes a 20 percent levy linked to China's alleged role in the global fentanyl trade. Beyond blanket duties, Trump has also targeted individual sectors. In March, he imposed a 25 percent levy on steel and aluminum imports, which was doubled to 50 percent last month. A 25 percent tariff on imported autos has also been rolled out, though vehicles imported under the US-Mexico-Canada Agreement (USMCA) may qualify for lower rates. This auto tariff extends to vehicle parts, impacting manufacturers globally, notably German car exports to the US, which fell by 13 percent in April and 25 percent in May, incurring estimated costs of around half a billion euros for German carmakers.

To avoid these escalating levies, numerous countries have been rushing to strike deals with Washington. So far, the UK and Vietnam have secured pacts, and China has managed to temporarily lower some tit-for-tat duties. Immediate US neighbors Canada and Mexico, initially targeted over illegal immigration and fentanyl, are largely exempt from the 10 percent global tariff under the USMCA, covering large swaths of products, including potash. Certain commodities like gold, silver, energy, pharmaceuticals, semiconductors, and lumber are also excluded from the global tariff, though Trump is considering future levies on some of these sectors.

The European Union and the United States are currently engaged in frantic, high-stakes negotiations to avert sweeping 50 percent tariffs on all EU exports. The EU is reportedly prepared to accept a 10 percent blanket tariff as a compromise, provided Washington suspends the harsher duties and offers leeway on sector-specific items like the 25 percent car tariff. Talks aim for an