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US begins collecting Trump's 10% tariff and shatters global trade norms

Customs agents in the United States began collecting President Donald Trump’s unilateral 10% tariff for all imports of goods from many countries Saturday. Higher levies will be implemented next week on goods imported from 57 major trading partners.

At 12:01 am, the initial 10% "baseline tariff" went into effect in U.S. ports of entry, airports, and customs storage facilities. ET (0401 GMT), Trump has now formally rejected the post-World War Two tariff system that was mutually agreed upon.

Kelly Ann Shaw, former White House adviser on trade during Trump's initial term and a lawyer at Hogan Lovells, said: "This is by far the biggest trade action in our lifetime."

Shaw said at a Brookings Institution conference on Thursday that the tariffs would evolve as countries sought to negotiate lower rates. "But this is massive. She added that this is a significant and seismic shift in how we do business with all countries on the planet.

Trump's tariff announcement on Wednesday shook the global stock markets. By Friday, S&P 500 stock value had plummeted by $5 trillion, a record decline in two days. Oil and commodity prices plummeted, while investors fled into the safety of government bond investments.

Australia, Britain and Saudi Arabia are among the first countries to be hit by the 10% tariff. U.S. Customs and Border Protection has sent a bulletin to all shippers indicating that there is no grace period on Saturday at midnight for any cargoes in the water.

A U.S. Customs and Border Protection Bulletin provided a 51-day period of grace for cargos that were loaded on vessels or planes and transiting to the U.S. prior to 12:01 a.m. ET Saturday. The cargoes must arrive by 12:01 am. ET on May 27, to avoid 10% duty.

On Wednesday at the same time, Trump's "reciprocal tariffs" of higher rates of between 11% and 50% will come into effect. Imports from the European Union will face a tariff of 20%, while Chinese products will be subject to a tariff of 34%. This will bring Trump's new tariffs against China up to 54%.

Vietnam, which has benefited from Trump's first term trade war against Beijing by shifting U.S. supply chain away from China, will face a 46% tax and agreed to discuss an agreement with Trump on Friday.

Canada and Mexico are exempted from Trump's new duties, as they still face a 25% tariff for products that do not meet the U.S. Mexico Canada rules of origin.

Trump excludes goods that are subject to separate 25% tariffs on national security, such as steel, aluminum, automobiles, trucks, and auto parts.

The list also includes more than 1,000 categories of products that are exempt from tariffs. These include crude oil and petroleum products, as well as other energy imports. They also include pharmaceuticals, uranium and titanium, lumber, semiconductors and copper. The Trump administration is looking into several of these sectors, except for energy. David Lawder reports.

(source: Reuters)