Tariffs bite as August deadline looms

The US has signed a wave of bilateral trade deals in recent weeks, including with the UK, EU, Japan, Vietnam, Indonesia, and others. However, negotiations with key partners such as India, Canada, Mexico, and Thailand remain unresolved.

• More tariffs are on the way: copper joins steel, autos, and a range of consumer goods on the US’s expanding list of targets. These new trade tariff measures plus the associated policy uncertainty, are already weighing on global trade volumes – our Maritime Trade Index fell more than 2% y/y in July, the sharpest drop since early 2023.

• New duties on transhipments aim to close backdoor entries to the US. Vietnam, in particular, is in the firing line, with our analysis showing up to one-third of its recent export growth overlaps with growth in Vietnam’s imports of the same goods from China.

• After a resilient first half of 2025, trade growth will decelerate through 2026. The cumulative drag from tariffs and softening demand will pull US imports 9% lower by 2026. Countries hardest hit by US tariffs, including China, Mexico, and Canada, face the steepest declines.

• What’s more, risks to our forecasts are skewed to the downside. Given the rollercoaster ride of tariff announcements, our forecasts only include tariffs or trade deals that have come into effect and don’t yet include August’s pending tariff hikes. This leaves scope for further downgrades.