On the evening of July 31, United States President Donald Trump confirmed plans to move forward with tariffs on over 60 trade partners as part of his reciprocal tariffs program to reduce American trade deficits.
These tariffs came into effect at 00:01 U.S. Eastern Standard Time on August 7. Goods that were loaded onto ships destined for the U.S. before August 7 and delivered before October 5 will not be affected.
Ahead of this deadline, President Trump secured trade deals with several countries while others were left without an agreement and given a higher tariff rate.
United States inks new reciprocal tariff agreements with key trade partners
Prior to the August 7 tariff deadline, many countries finalized agreements with the U.S. to reduce their overall tariff rate. Among the most notable deals was the U.S.-E.U. agreement, which established a U.S. 15% tariff on E.U. goods. Although the 15% tariff is higher than desired by E.U. officials, it is significantly lower than the previously threatened 30% tariffs.
As part of the deal, the E.U. agreed to make $750 billion (€648 billion) of U.S. energy purchases and $600 billion (€519 billion) of U.S. investments, as well as to further open E.U. market access for U.S. companies. The U.S. and the E.U. also agreed to zero-for-zero tariffs on some products, including aircrafts and their parts, certain chemicals, semiconductor equipment and certain agricultural products.
Product-specific tariffs on the E.U. on goods including automobiles, aviation components, pharmaceuticals, and semiconductors will be capped at 15%. Several details remain under negotiation, including the full list of tariff exemptions on E.U. products, which E.U. officials hope will ultimately include alcoholic beverages, medical devices, and chemicals. The E.U. has confirmed it will delay tariff countermeasures for a period of six months while ensuring that the U.S. meets the terms set forth in the deal.
The U.S. also made several other new trade deals in the days prior to the initial August 1 deadline. As part of a ceasefire deal brokered between Thailand and Cambodia following a recent outbreak of armed conflict, the U.S. established tariff rates of 19% on both Thai and Cambodian imports, a significant decrease from the previously threatened 36% tariffs on Thailand and 49% tariffs on Cambodia. In return, Cambodia will scrap all tariffs on U.S. goods and commit to buying at least 10 Boeing aircraft. Additionally, the U.S. inked a trade deal with South Korea under which the U.S. will lower South Korea’s reciprocal trade rate to 15% and South Korea will invest $350 billion (€302 billion) into select U.S. projects, including investments in shipbuilding, chip manufacturing, nuclear power, batteries, and biologics. South Korea will also buy $100 billion (€86 billion) worth of U.S. energy products over the next three-and-a-half years and will allow automobiles and certain agricultural products from the U.S. to enter duty-free.
Revised reciprocal tariff rates announced for countries without trade agreements
For countries that have yet to negotiate a reciprocal tariff deal with the U.S., the U.S. government announcement detailed tariff rates ranging from 10% to 50%. The recent round of tariffs includes exemptions for other goods currently being investigated for tariffs, including pharmaceuticals. All countries running a trade deficit with the U.S. were given the lowest rate of 10%. Many affected countries plan to continue pursuing negotiations with the U.S., including Myanmar, New Zealand, Switzerland, and Taiwan. However, U.S. officials claimed that the rates are unlikely to be cut again after August 7. In addition to these tariffs, the U.S. announced a new 40% tariff on goods that are transshipped through third countries. The levy is intended to target Chinese goods shipped through other trade partners including Vietnam, Thailand, and Indonesia, and would be charged instead of the country of origin’s original reciprocal tariff rate.
Although India and the U.S. initially indicated that talks were progressing towards a deal before August 1, President Trump announced that no deal had been reached, and the U.S. would implement a 25% tariff on Indian imports. Additionally, on August 6, the U.S. announced it would charge a further 25% tariff effective August 27 over Indian purchases of Russian oil and gas products, bringing the total tariff rate to 50% after that date. Imports of Indian laptops, smartphones, and servers will be exempted from the 25% tariff effective from August 1 through at least August 14 while U.S. tariff investigations into consumer electronics continue.
The U.S. government also finalized its 50% tariffs on Brazil over the lawsuit currently pending against former Brazilian President Jair Bolsonaro. Despite facing the highest of all new reciprocal tariff rates, President Trump’s executive order excluded key Brazilian exports to the U.S., including orange juice, Embraer aircraft, oil, coal, minerals, various chemicals and Brazil nuts, that constitute over 40% of Brazilian exports to the U.S.
U.S. raises tariffs on Canada to 35% while exemptions continue for Mexico and China
On July 31, the U.S. raised tariffs on Canada to 35% ahead of the initial August 1 reciprocal tariff deadline. Exemptions on goods covered by the United States-Canada-Mexico Agreement (USMCA) will continue. Although the reason for the increase was not immediately apparent, President Trump indicated that Canada’s decision to recognize a Palestinian state complicated negotiations for a trade agreement. It is unclear if Canada will implement countermeasures in response. Despite the increased tariffs on Canada, President Trump delayed a previous 30% tariff threat on Mexico and enacted a 90-day exemption from further tariffs, maintaining the current rate of 25% on goods excluded from USMCA as negotiations continue. The U.S. and Mexico may also soon sign an additional security agreement aimed at addressing several of President Trump’s concerns regarding gang activity and the fentanyl trade in Mexico.
Following trade talks between the U.S. and China held in Stockholm, Sweden from July 28-29, the current implementation date for 30% reciprocal tariffs on China remains set for August 12. While officials announced an agreement during the summit to potentially extend the deadline, U.S. officials clarified that the extension was pending the direct approval of President Trump, who has yet to confirm or deny the extension. U.S. Treasury Secretary Scott Bessent has suggested a further extension could last for 90 days.
United States enacts copper tariffs and promises further tariffs to come
On August 1, the U.S. 50% tariffs on copper products came into effect. In an executive order, the Trump administration detailed that the tariffs would only apply to semi-finished products such as copper pipes, wires, rods, sheets and tubes, as well as products made with copper including pipe fittings, cables, connectors and electrical components. The order excludes key copper inputs including ores, concentrates, and cathodes. Additionally, the order also enacted several export controls to require 25% of copper scrap produced in the U.S. to be sold domestically beginning immediately, and to require 25% of domestically produced copper ore, concentrates, cathodes and anodes to be sold domestically beginning in 2027. The latter requirement will be increased to 40% in 2029.
Additionally, on August 6, President Trump shared new plans to enact a 100% tariff on imported semiconductors. The tariff is scheduled to be officially announced within the following week. The measure is expected to provide exemptions for semiconductor manufacturers that have made or pledged significant investments in the U.S., which likely includes companies such as Nvidia, Micron, and Taiwan Semiconductor Manufacturing Corporation that have pledged U.S. investments. It is unknown when these tariffs would come into effect. President Trump also provided further details on upcoming pharmaceutical tariffs. According to the announcement, the U.S. will place a small tariff of an unspecified amount on pharmaceutical products at an unknown date in the immediate future, followed by a tariff of 150% after a year and a half. Tariffs will ultimately be raised to 250% at an unspecified date.
President Trump has also passed a measure to end the “de minimis” package tariff exemption for all countries after previously ending the exemption for China and Hong Kong. Under the exemption, small packages containing goods valued at less than $800 (€691) were not charged tariffs and customs paperwork was reduced. The exemption is set to expire on August 29.
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