Kazakhstan Finds Itself in Trump's Tariff Crosshairs
New tariffs threaten key exports as analysts warn of economic repercussions
In a surprising turn of events, Kazakhstan has been included in a list of countries facing new tariffs announced by former President Donald Trump. This decision has raised eyebrows among analysts and local experts, who are now assessing the potential impact on the nation’s economy.
According to analysts from the Telegram channel Tengenomika, the announcement has already had immediate effects on global markets. Following Trump's statement about the new tariffs, the dollar weakened, and oil prices saw a decline. The value of American WTI crude oil fell by 0.27%, while European Brent crude decreased by 0.59%. Market participants are linking these shifts to concerns that Trump's trade policy will hinder global economic growth, ultimately leading to reduced demand for raw materials.
In 2024, Kazakhstan exported approximately $2 billion worth of goods to the United States. The major exports included oil, valued at $1.1 billion, uranium at $322.9 million, and silver at $239.9 million. Additionally, Kazakhstan supplies ferroalloys and tantalum to the U.S. market. However, imports from the United States amounted to $2.1 billion, including cars worth $322.7 million, airplanes and parts valued at $93.4 million, and medical devices totaling $38.7 million.
Experts have voiced concerns that the new tariffs will place significant pressure on Kazakhstan's key exports, such as uranium, silver, ferroalloys, and tantalum. They warn that these tariffs could severely impact competition, potentially pushing these commodities out of the market. The current steps taken by the U.S. are seen as a dismantling of the previous global trade system, with the World Trade Organization (WTO) losing its authority. The rules are no longer universal, but rather dependent on current political will.
As the situation unfolds, the Ministry of Trade in Kazakhstan faces a daunting task ahead. They will need to engage in negotiations with the American government to discuss potential changes to the trading rules that could mitigate the impact of these tariffs.
In a broader context, Trump recently announced the beginning of what he termed a "trade war" against countries he perceives as taking advantage of the United States. He referred to the day of the announcement as "The Day of America's Liberation from Freeloaders." This trade war includes the introduction of tariffs on imports from around 180 countries, with Kazakhstan facing a tariff rate of 27%. Notably, Russia and Belarus were excluded from this list, a point clarified by the head of the Ministry of Finance.
Trump stated that a base tariff of 10% will come into effect on April 5, 2025, with "mirror" tariffs for certain countries starting on April 9, 2025. Experts have elaborated on the reasons behind the U.S. imposing trade duties on Kazakhstan and how these new tariffs could affect prices within the country.
Meanwhile, the situation is not limited to Kazakhstan. Other regions, including remote territories like Norfolk Island, have also found themselves unexpectedly included in the tariff list. Local residents expressed confusion, as the island, home to only 2,000 people, has minimal export activities aside from a few Kentia palm trees sent to Europe. Richard Cottle, a local business owner, described the inclusion of Norfolk Island in the tariff list as "definitely a mistake," emphasizing the island's limited economic footprint.
Norfolk Island's administrator, George Plant, contradicted claims that the island exported goods to the U.S., stating that no products had been sent. This has only added to the bewilderment, especially as even more isolated territories like Heard Island and the McDonald Islands, which are uninhabited and home only to penguins, are subject to a 10% tax.
Australian Prime Minister Anthony Albanese, currently in the midst of an election campaign, also expressed his astonishment at the decision, commenting, "There is no safe place on Earth." According to the Economic Complexity Observatory, Norfolk Island exported about $655,000 worth of goods to the United States in 2023, primarily leather shoes valued at $413,000. However, these figures are disputed by local officials.
In stark contrast, the statistics for Heard and McDonald Islands paint an even more puzzling picture. The Westpac Bank reported that in 2022, the United States imported $1.4 billion worth of "electrical machinery and equipment" from these islands, though the exact amount remains uncertain. Previous years saw imports from this neutral zone ranging between $15,000 and $325,000.
As the implications of these tariffs continue to unfold, both Kazakhstan and the remote territories face uncertain economic futures. The decisions made by the U.S. government will undoubtedly shape the global trade landscape, leading to significant challenges for countries that find themselves caught in the crossfire of a trade war.
