US President Donald Trump announced sweeping tariffs on US partners on Wednesday, with an aim to boost domestic manufacturing and protect local industries.
The world’s largest economy will impose a minimum of 10 per cent levies on all imports. However, the tariff rates are higher for some trading partners including China, India and the EU.
The baseline 10 per cent tariff will go into effect on April 5, while the higher reciprocal rates will start on April 9.
“April 2, 2025, will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again,” Mr Trump said while announcing the new tariffs in Washington on Wednesday.
What are reciprocal tariffs and how do they work?
The US will impose the same tax on imports that other countries charge on American exports on a product-by-product basis.
For example, if a country imposes a 2 per cent tax on certain US products that are exported, the US will levy the same amount of import tax on that category. The tit-for-tat tariffs are expected to disrupt trade around the world and make goods costlier for US consumers and businesses.
Which countries are facing higher tariffs?
Some of the biggest economies in the world are being charged higher tariffs, including 34 per cent for China, 26 per cent for India and 20 per cent for the EU. Countries including Vietnam, Pakistan, Laos, Thailand, Sri Lanka, Switzerland and South Africa are also facing higher tariffs as part of the new trade policy.
Lesotho as well as Saint Pierre Miquelon are subject to a 50 per cent tariff, the highest of the charges announced, followed by Cambodia at 49 per cent, Laos at 48 per cent, Madagascar (47 per cent), Vietnam (46 per cent), Sri Lanka and Myanmar (both 44 per cent), Syria (41 per cent), Mauritius (40 per cent) and Iraq (39 per cent).
Serbia, Botswana, Taiwan and Indonesia are also facing higher tariff charges.
China has been hit particularly hard by the new tariffs, with the total levy on imports reaching more than 50 per cent after the world’s second largest economy was slapped with 20 per cent duties earlier this year.
Meanwhile, countries in the Middle East including Saudi Arabia, the UAE, Egypt and Morocco will have a tariff rate of 10 per cent. Syria and Iraq are subject to tariffs of 41 per cent and 39 per cent, respectively.
A group of islands near Antarctica including Heard Island and McDonald Islands have also been levied with a 10 per cent tariff.
Canada and Mexico, the two largest US trading partners, already face 25 per cent tariffs on many goods and will not face additional levies from Wednesday's announcement.
Russia, North Korea, Cuba and Belarus are not included in the list as they already face extensive sanctions and trade is minimal with the US.
How are countries responding?
China has firmly opposed the tariffs and will adopt countermeasures to safeguard its rights and interests, Xinhua news agency said, quoting a representative of the Ministry of Commerce on Thursday.
“There is no winner in a trade war, and protectionism leads nowhere,” the representative said. The approach by the US disregards the balance of interests achieved through many years of multilateral trade negotiations and ignores the fact that the US has long benefited from international trade, the representative added.
The tariffs are “a major blow to businesses and consumers worldwide. Europe is prepared to respond”, warned European Commission President Ursula von der Leyen.
“Tariffs are taxes, paid by the people. But Europe has everything to protect our people and our prosperity. We will always promote and defend our interests and values,” she said in a post on social media platform X on Thursday.
Ajay Sahai, chief executive of the Federation of Indian Export Organisations, told AFP the tariffs will “hurt demand” for its exports.
“The tariffs slapped on India are definitely both high and higher than expected,” he said.
But he said rival nations like China and Vietnam had been hit harder, which opened up space for India to gain a market share.
What comes next?
The new tariffs are likely to cause a global trade war that threatens to stoke inflation and stall economic growth. Oil and global stocks have already dropped following the announcement on concerns related to global growth.
The International Monetary Find will probably lower the economic outlook slightly in its next World Economic Outlook update in about three weeks, but “we don't see recession on the horizon”, its managing director Kristalina Georgieva told Reuters this week.
The IMF in January raised its global economic growth estimate for this year to 3.3 per cent from 3.2 per cent, with a half percentage-point upgrade to the US outlook – to 2.7 per cent – accounting for most of that increase.
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Fighter profiles
Gabrieli Pessanha (Brazil)
Reigning Abu Dhabi World Pro champion in the 95kg division, virtually unbeatable in her weight class. Known for her pressure game but also dangerous with her back on the mat.
Nathiely de Jesus, 23, (Brazil)
Two-time World Pro champion renowned for her aggressive game. She is tall and most feared by her opponents for both her triangles and arm-bar attacks.
Thamara Ferreira, 24, (Brazil)
Since her brown belt days, Ferreira has been dominating the 70kg, in both the World Pro and the Grand Slams. With a very aggressive game.
Samantha Cook, 32, (Britain)
One of the biggest talents coming out of Europe in recent times. She is known for a highly technical game and bringing her A game to the table as always.
Kendall Reusing, 22, (USA)
Another young gun ready to explode in the big leagues. The Californian resident is a powerhouse in the -95kg division. Her duels with Pessanha have been highlights in the Grand Slams.
Martina Gramenius, 32, (Sweden)
Already a two-time Grand Slam champion in the current season. Gramenius won golds in the 70kg, in both in Moscow and Tokyo, to earn a spot in the inaugural Queen of Mats.
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Wednesday's results
Finland 3-0 Armenia
Faroes Islands 1-0 Malta
Sweden 1-1 Spain
Gibraltar 2-3 Georgia
Romania 1-1 Norway
Greece 2-1 Bosnia and Herzegovina
Liechtenstein 0-5 Italy
Switzerland 2-0 Rep of Ireland
Israel 3-1 Latvia
The specs
Common to all models unless otherwise stated
Engine: 4-cylinder 2-litre T-GDi
0-100kph: 5.3 seconds (Elantra); 5.5 seconds (Kona); 6.1 seconds (Veloster)
Power: 276hp
Torque: 392Nm
Transmission: 6-Speed Manual/ 8-Speed Dual Clutch FWD
Price: TBC
LAST-16 FIXTURES
Sunday, January 20
3pm: Jordan v Vietnam at Al Maktoum Stadium, Dubai
6pm: Thailand v China at Hazza bin Zayed Stadium, Al Ain
9pm: Iran v Oman at Mohamed bin Zayed Stadium, Abu Dhabi
Monday, January 21
3pm: Japan v Saudi Arabia at Sharjah Stadium
6pm: Australia v Uzbekistan at Khalifa bin Zayed Stadium, Al Ain
9pm: UAE v Kyrgyzstan at Zayed Sports City Stadium, Abu Dhabi
Tuesday, January 22
5pm: South Korea v Bahrain at Rashid Stadium, Dubai
8pm: Qatar v Iraq at Al Nahyan Stadium, Abu Dhabi
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if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg
Other key dates
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Finals draw: December 2
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Finals (including semi-finals and third-placed game): June 5–9, 2019
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Euro 2020 play-off draw: November 22, 2019
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Euro 2020 play-offs: March 26–31, 2020
Killing of Qassem Suleimani
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
