Despite 50% punitive tariffs imposed by the Trump led administration, according to Oxford Economics, the United States has announced comprehensive tariffs exemptions on nearly 200 agricultural products, sealing a prominent trade deal with Switzerland. It simply eases the agricultural trade, decreasing the affect of effective tariff rate by 0.6 percentage points to 12.8 per cent.
Tariff Exemptions Emerge In The Midst Of Growing Political Pressure
This relaxation targets food products like beef, coffee, bananas and nuts, earlier subjects to tariff as high as 50 percent. These tariffs exemptions emerge in the midst of growing political pressure to restrict grocery inflation before the 2026 mid-term elections. Consumer sentiment in United States stays highly sensitive to food prices, especially among low-income households.
Moreover, the report states India and Brazil as strong candidates for near term tariff reductions, indicating potential relief for tea exporters, spice exporters and seafood exporters. Interestingly, media reports from President Donald Trump’s trip to Asia proposes for a US-Brazil trade deal are favourable. Trade Tensions with India may also invite a resolution. Shockingly, both countries face some of the highest tariffs rates.
Apart from India, other Asian economies-especially those exporting coffee, tea and processed foods- stand to gain from the US administration’s evolving tariffs strategy. If current tariffs were fully passed through to consumers, food prices would rise by 0.9 per cent. It highlights the political urgency behind these exemptions.
Switzerland’s GDP growth could increase by 0.4 % points in 2026
Surprisingly, Switzerland’s GDP growth could increase by 0.4 percentage points in 2026 due to its new trade deal. Commodity exporters such as South Africa, Chile and Peru will witness effective tariff rates drop by 4 percentage points or more. When it comes to Asia, the latest developments indicates a window of opportunity to deepen trade ties with the US in midst global supply chains.
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