The Winners and Losers of Trump’s New Tariff Reality

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1:09Brendan Murray:Bloomberg Audio Studios. Podcasts. Radio. News. President Donald Trump is doubling down on global tariffs, even after his signature tariff strategy was ruled illegal by the Supreme Court. I will sign an order to impose a 10 % global tariff under Section 122. Immediately after the court decided that the president couldn't use broad emergency powers to impose tariffs, Trump announced a new 10 % global levy, using a different justification. And just a day later, Trump said he would ratchet up the tariff rate to 15 % for 150 days, the legal maximum that can be in place without congressional approval.

1:54Brendan Murray:Now he's focused on a new statute, never been tested before, that would allow him to raise tariffs to 15 percent, but only in certain situations. The Trump administration has also asked the U.S. trade representative to launch new accelerated Section 301 investigations, which would allow the U.S. to impose retaliatory tariffs on countries whose actions it deems unreasonable or discriminatory against U.S. trade. For U.S. trading partners around the world, it's causing tariff whiplash all over again. On Monday, the European Union postponed a vote on the trade deal it negotiated with the U.S. late last year, saying it needs clarity on the Trump administration's trade policies first.

2:42Brendan Murray:India's trade delegation has also postponed a trip to the U.S. to finalize a trade deal, which had been set for later this week.

2:50Jenni Marsh:I don't think we're going to see completely fully renegotiated deals, But the countries that are in this process are going to want to know the details of what they're going to roll out before they sign on the dotted line of anything with the Trump administration.

3:05Brendan Murray:Brendan Murray oversees Bloomberg's trade coverage from London.

3:08Jenni Marsh:If you're sitting in Brussels or Beijing right now, you're saying perhaps maybe we have more leverage than we did last week.

3:17K. Oanh Ha:If you're Beijing, you're sort of now on a level playing field with U.S. allies.

3:21Brendan Murray:And Jenny Marsh oversees Bloomberg's coverage of greater China's economy and politics.

3:27K. Oanh Ha:You've gone from the biggest target when Trump first came in to now sort of, you know, you have a fairly level playing ground.

3:33Brendan Murray:She says, like the EU, China sees the Supreme Court's decision as a loss of leverage for the U.S. and a major win for China's trade ambitions ahead of a high-stakes meeting between President Trump and President Xi Jinping late next month. So what was achieved?

3:50K. Oanh Ha:By the trade war?

3:52Brendan Murray:Yeah.

3:52K. Oanh Ha:What was achieved? I think China realized it's not half as dependent on America as everyone thought.

4:03Brendan Murray:This is The Big Take from Bloomberg News. I'm Sarah Holder. Today on the show, my colleague Wan Ha, who hosts The Big Take Asia podcast, sits down with Brendan Murray in London and Jenny Marsh in Hong Kong to discuss what the end of the U.S.'s reciprocal tariffs and the potential for a new global tariff rate means for America's trading partners across Asia and around the world.

4:30Brendan Murray:Thank you so much, both of you, for making time to join us. Between the three of us, we've got big parts of the world covered. Brendan, you're based in London. Jenny, you're here with me in Hong Kong. Before we get into what this ruling means for countries and manufacturers, I have to ask, what's been the reaction to the Supreme Court ruling on the ground where you are?

4:50Jenni Marsh:I think a lot of people have more questions right now than they do answers. President Trump came out pretty assertively after the Supreme Court ruled against him and said, in effect, nothing's changed. I still have tariff authorities, and I may even use them to a greater degree than I did before. The story is the same. The U.S. is going to use tariffs to try to reshore manufacturing, create factory jobs, and essentially, as President Trump would say, rebalance the global trading system back in the U.S.'s favor.

5:21Brendan Murray:That's interesting. So he's trying to say nothing's changed here.

5:24Jenni Marsh:Yeah, nothing's changed. But, you know, in a sense, a lot of things have changed. President Trump, by most accounts, has lost a lot of leverage here.

5:32Brendan Murray:Jenny, what about here in Hong Kong and broadly in China? What's been the reaction?

5:36K. Oanh Ha:It's been pretty muted and measured, I would say. But also when you sort of look at this, China sort of came out from the ruling as one of the winners. So, you know, in a way it's hard for them to sort of come out sort of threatening anything because they've probably benefited from the Supreme Court ruling. I think, you know, particularly ahead of the Xi-Trump summit as well, they have to be thinking this sort of weakens Trump's hand just a couple of weeks before he fires into Beijing. I think that being said, China realizes there still is a Section 301 investigation pending against them. So in that sense, they're actually weaker than other countries and that this sort of investigation has already sort of been in train for months.

6:17That could be expedited now, so they could quickly see more tariffs.

6:21K. Oanh Ha:And those tariffs under that investigation have no upper limit, and they're pretty sticky. The ones imposed under Section 301 from Trump's first term are still in place. So that probably also is why they're sort of waiting and seeing before coming out with a sort of a strong reaction. And then I think for exporters in this region, particularly sort of ones that had the China plus one strategies, for them, I think there's a big question mark now over, was it a good idea to invest in new factories in Cambodia and Vietnam? Is it as useful as I thought it was going to be?

6:51Brendan Murray:Jenny, who are the winners in this and what does this victory mean for them?

6:57K. Oanh Ha:The biggest winners so far is China, India and Brazil. They are facing the highest tariffs and they're the ones that have seen the biggest sort of percentage point decreases. But I think everyone's aware that this is just the holding pattern, right? This is what Trump has done is sort of to bridge the gap until he can sort of then use his other tools to get tariffs really where he wants them. And it's going to be much more complicated and harder for business to navigate because rather than making it sort of broad tariffs, is going to be this sort of like jumble of different sort of sectorial tariffs.

7:28K. Oanh Ha:So Japan, South Korea and Taiwan, the big thing they are looking at still now is a Section 232 investigation into chips. And for Taiwan, actually, that was always the case because the trade deal they struck had a carve out for chips, which is sort of the biggest thing they export to the US. So in some respects, it was always going to be around these specific investigations into sort of really contentious sectors. And I think that hasn't really changed. So even though it's sort of a headline win in some of these ways, some of these countries, there are sort of more potent measures down the pipeline.

8:01Brendan Murray:And Brendan, if we talk about winners, someone's losing. Which countries would you place on that list and why?

8:07Jenni Marsh:The United Kingdom for months has said we negotiated the best deal of a 10 percent rate with President Trump last year. Now this across the board, 15 percent. Does that mean they're one of the losers? in this? Are they going to get a special carve out in however the implementation from the White House goes ahead? We haven't talked yet about Canada and Mexico. They've been carved out of the 15 % because they're USMCA partners with the US. So in that case, they're not really dealt a setback, but they are in the process of renegotiating that North American free trade agreement. And Trump, with all of his displeasure with the Supreme Court, may find Canada and Mexico as outlets to vent his frustration at because he has really gone after Canada recently, Mexico to a lesser degree.

9:02Jenni Marsh:But if those negotiations were expected to go smoothly before, Or now the president, without his favorite tariff tool, has got to take another approach. And those two economies could be in for a rough ride over the coming months.

9:20Brendan Murray:And it seems like countries like Japan and South Korea that had negotiated a 15 % tariff rate, it looks like they've now just also lost their competitive advantage as well, right? If everyone else gets 15%.

9:33K. Oanh Ha:Yeah, absolutely. And I think if you're these trade negotiators and you spent like the last year painstakingly having these meetings and sort of working out these deals, convincing your companies to get behind you, it must be so frustrating to wake up and to sort of realize that hard work has sort of been for nothing. At the same time, it makes it harder for Japan, South Korea to sort of say that their trade deals are invalid because the tariffs are actually where they negotiated them to be at. So in a way, it's kind of status quo for them.

10:06Brendan Murray:After the break, how the last year of tariff drama has shifted the global trade balance and what consequences the latest twist could have for the Xi Trump meeting next month.

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