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The US administration’s April 2 tariff announcement (later paused for 90 days) is part of a broader strategy aimed at compelling foreign governments to reduce trade barriers to American goods.Moving beyond traditional tariffs, the policy targetsnon-tariff barriers such as agricultural regulations, taxation systems, currency practices, product standards, legal frameworks, and customs procedures.
Countries have been given a three-month deadline to make concessions or face new tariffs ranging from 10 per cent to over 50 per cent. Tariffs on Chinese goods have already taken effect.
However, many nations face major challenges in meeting US demands, particularly in lowering tariff rates and navigating ambiguous negotiation terms. Officials from several targeted countries have expressed uncertainty about the administration’s specific requirements.
US Vice President JD Vance confirmed that India has agreed to begin trade talks, while other nations are still attempting to define the negotiation framework. Analysts, quoted by the Associated Press suggest the administration’s goals are multifaceted- seeking not only to raise revenue and revive US manufacturing but also to open foreign markets and reshape international tax and regulatory systems.
Key areas of non-tariff focus:
Currency exchange rates
US President Trump has accused countries like Germany, China, and Japan of “global freeloading” by allegedly devaluing their currencies to make exports cheaper. While the European Central Bank’s rate cuts may weaken the euro, the Bank of Japan’s cautious rate hikes are expected to strengthen the yen. The US dollar has already fallen from 160 to around 140 yen, and analyst Shrikant Kale predicts a further decline to 120 yen.
Agricultural barriers
US agricultural exports face resistance due to food safety and domestic protection concerns. Japan restricts US rice and potatoes, Europe bans hormone-treated beef and chlorine-washed chicken, and Korea maintains age-based restrictions on beef imports tied to past concerns around bovine spongiform encephalopathy, or mad cow disease.
US potato growers, for example, have long targeted Japan’s estimated $150 million market. Yet despite prolonged discussions, Japan has delayed progress, citing regulatory concerns. “It’s pure politics,” said National Potato Council CEO Kam Quarles. “If Japanese politicians see Trump’s tariffs as more painful than domestic pushback, a deal becomes more likely.”
In Korea, lifting beef restrictions remains politically sensitive. “It’s still controversial due to the 2008 backlash. The government will be cautious,” said trade law expert Jaemin Lee.
Taxation systems
The Trump administration has criticised the widespread use of value-added tax (VAT) systems, arguing they disadvantage US exports. However, economists maintain that VAT is trade-neutral. Over 170 countries use VAT, in contrast to the US’s fragmented sales tax model.
A potential increase in tariffs could affect European nations, where Value Added Tax (VAT) rates exceed 20 per cent based on product categories, and impact other 170-plus nations employing similar taxation methods. The United States stands unique in its approach, eschewing VAT in favour of state-specific sales taxes.
Nations are unlikely to alter their taxation frameworks to accommodate Trump’s stance. The European Union has explicitly stated that VAT remains non-negotiable.
Product standards
Japan’s auto safety regulations and electric vehicle subsidy rules have been flagged as obstacles to US exports. Similar regulatory hurdles exist in Korea’s pharmaceutical and automotive sectors.
Bureaucratic procedures
Cumbersome import processes in countries like Japan and Korea hamper US exports of seafood, grains, and manufactured goods. Delays and red tape have become major trade friction points.
‘Buy American’
At its core, the administration’s agenda seems to prioritize reducing trade deficits through boosting US exports and shifting manufacturing back home. Some analysts question whether non-tariff concerns are genuine policy targets or merely justifications for tariffs.
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