President Donald Trump has just imposed fresh tariffs on every country in the globe, cementing his dramatic departure from America’s long-standing trade policy. Tariffs on the vast majority of American imports are projected to rise, including those from the few countries that negotiated separate trade agreements. The additional tariffs continue Trump’s reversal of decades of globalisation, which made America’s enormous services industry the envy of the world while contributing to the country’s lengthy fall in manufacturing. With only a few hours until its self-imposed August 1 trade deadline, the White House released critical details about its new trade policy late Thursday, along with its new tariff plan.
What are the new tariffs?
The White House confirmed Thursday that the “universal” tariff on goods entering the United States will continue at 10%, the same rate that was introduced on April 2. However, the 10% tax will only apply to countries with which the United States has a trade surplus, meaning it exports more than it imports. A senior administration official stated that this is true for most countries.
A new tariff floor of 15% will apply to countries with which the United States has a trade imbalance. Approximately 40 countries will pay the new 15% levy. That tariff will be lower for many of those countries than the April 2 “reciprocal” duties, but greater for a few. More than a dozen countries have tariff rates greater than 15%, either because they signed to a trade agreement with the United States or because Trump sent a letter to their leaders ordering a higher tariff. According to a senior administration official, those countries have some of the largest trade deficits with the United States.
What nations have tariffs above 15%? The White House listed 26 countries whose goods will be subject to US tariffs of more than 15%. A senior administration official asserted that these countries have massive trade deficits with the United States.
•Algeria: 30 percent.
•Bangladesh: 20 percent.
•Bosnia & Herzegovina: 30 percent
•Brunei: 25 percent.
•Cambodia: 19%.
•India: 25 percent.
•Indonesia: 19%.
•Iraq: 35%
•Kazakhstan: 25 percent
•Laos: 40%
•Libya: 30 percent.
•Malaysia: 19%.
•Moldova: 25%.
•Myanmar: 40 percent.
•Nicaragua: 18 percent
•Pakistan: 19%.
•Philippines: 19%.
•Serbia: 35%.
•South Africa: 30 percent
•Sri Lanka: 20 percent
•Switzerland: 39 percent.
•Syria: 41 percent.
•Taiwan: 20 percent.
•Thailand: 19%.
•Tunisia: 25 percent.
•Vietnam: 20 percent.
Furthermore, Mexico and Canada will continue to pay higher taxes on items that are not exempt from the US-Mexico-Canada free trade pact. Mexico agreed on Thursday to extend the current 25% tariff rate imposed by the United States on certain commodities for another 90 days. Non-exempt Canadian goods imported into the United States would pay a 35% duty as of Friday at 12:01 a.m. ET, up from 25% previously.
When do the tariffs go into effect?
The new tariff regime will not go into effect Friday, as had been expected. Instead, the tariffs will take effect on August 7 to give Customs and Border Protection enough time to make the required modifications to collect the additional levies. Canada’s tariffs are an exception; they will take effect on Friday.
Trade agreements stopped tariffs from being substantially higher.
The only major trading partners whose tariff rates remained unchanged on Friday were the United Kingdom, China, and Mexico. Trump inked a trade agreement with the United Kingdom and China. However, the agreement negotiated with China expires in less than two weeks, which implies that tariffs may shortly rise.
Trump threatened to hike tariffs on Mexico to 30% at 12:01 a.m. However, after speaking with Mexico’s president, Claudia Sheinbaum, on Thursday, he prolonged Mexico’s existing tariff rate for an additional 90 days. Over the last month, Trump has announced a number of other trade agreements. It’s uncertain whether they’ll be finalised, but it looks those countries may have avoided charges higher than those specified in their agreements. For example, items from the European Union were expected to pay 30% levies. The accord negotiated over the weekend, however, called for 15% taxes on most imports. That is the same rate that South Korean and Japanese goods will be taxed at.
That’s still higher than the 10% rate goods have been tariffed at since April, though.
Are these tariffs even legal?
That’s a question been discussed. Trump has cited the International Emergency Economic Powers Act to impose country-specific tariffs.
In May, the Court of International Trade determined that Trump had exceeded his legal power. Oral arguments for the administration’s appeal began Thursday, and a panel of judges looked sceptical that Trump had the authority to impose tariffs under those emergency powers. The unusual use of the IEEPA to levy tariffs was particularly concerning, especially given that the statute makes no mention of tariffs in the first place.
Several judges also questioned Trump’s argument for declaring an economic emergency. The president has previously claimed that US trade imbalances with other countries, or when the US imports more than it exports, constitute a national economic emergency requiring tariffs to be corrected. However, Judge Raymond Chen questioned: “Can the trade deficit be an extraordinary and unusual threat when we have had trade deficits for decades?”
The appeals court may take weeks or even months to make a decision. Following that, it might still be challenged at the Supreme Court. Regardless of the final conclusion, Trump has a number of levers at his disposal to impose additional tariffs while keeping many in place.
Will Trump extend the tariff deadline again?
Technically, he did. New tariff rates were supposed to go into effect Friday, but they will now primarily take effect on August 7. However, the president has given no indication that he will halt these levies any further.
However, he has said same about other tariff deadlines, only to prolong them. In summary, everything, even the recently implemented tariff rates, is subject to change upon publication of a Truth Social post. Haven’t we come here before? The tariff changes recall Trump’s “Liberation Day” in April, when he raised import tariffs across the board. The move upended financial markets and fuelled worries of a global crisis. Trump eventually delayed the “reciprocal” April tariffs hours after they went into effect, later establishing August 1 as the new deadline for trade agreements under threat of increased tariff rates. Trump informed certain countries of the rates they would pay if no new agreements were reached that day, but he appeared to keep other countries in the dark.
Are tariffs fuelling inflation?
Inflation has remained relatively low during Trump’s previous tariff rounds, but this might change if higher rates take effect. Companies such as Procter & Gamble and Walmart have already announced price increases in response to tariffs.
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