The president Donald Trump has just established new tariffs for all countries in the world, consolidating their extreme rupture with the Commercial policy Traditional two USA.
Tariffs on the vast majority of US imported goods are scheduled to increase – even for the small group of countries that negotiated individual trade agreements.
Taller rates continue Trump’s reversal of the decades of globalization that made the economy of services the envy of the world – but contributed to their long decline in manufacturing.
With only a few hours remaining before the self-imposed commercial time of August 1, the White House provided important details about its new trade policy on Thursday night-and, along with it, its new tariff plan.
What are the new fares?
The White House announced on Thursday that the “Universal” fare for goods entering the United States will remain at 10%, the same level as implemented on April 2.
But this 10% rate will only apply to countries with which the US has commercial surplus – countries to which the United States exports more than matter. This applies to most countries, according to a high administration official.
A rate of 15% will serve as a new tariff floor for countries with which the United States have commercial deficit. About 40 countries will pay this new rate of 15%. This fare will be smaller for many of these nations than the “reciprocal” tariffs of April 2, but will be larger for some.
And more than a dozen countries have rates more than 15%, either because they agreed with a commercial structure with the United States or because Trump sent to their leaders a letter dictating a higher fare.
The high administration official said these countries have some of the largest commercial deficits with the United States.
Which countries have tariffs greater than 15%?
The White House identified 26 countries whose products will be subject to American tariffs over 15%. A high government official said these countries have excessive commercial deficits with the United States.
- Algeria: 30%
- Bangladesh: 20%
- Bosnia and Herzegovina: 30%
- Brunei: 25%
- Cambodia: 19%
- India: 25%
- Indonesia: 19%
- Iraq: 35%
- Kazakhstan: 25%
- Laos: 40%
- Libya: 30%
- Malaysia: 19%
- Moldova: 25%
- Myanmar: 40%
- Nicaragua: 18%
- Pakistan: 19%
- Filipinas: 19%
- Serbia: 35%
- South Africa: 30%
- Sri Lanka: 20%
- Switzerland: 39%
- Syria: 41%
- Taiwan: 20%
- Thailand: 19%
- Tunisia: 25%
- Vietname: 20%
Furthermore, Mexico e Canada Cwill face to face higher rates for products that are not exempt by the US-Mixico-Canada Free Trade Agreement.
On Thursday, Mexico agreed with the 90-day extension of the 25% fare that the US applies to these items.
Non-exempt Canadian products imported to the United States will have a 35% tariff from Friday at 00h01 (east US time)-above the previous 25% rate.
When are the rates come into force?
The new tariff regime will not come into force on Friday, as expected.
Instead, rates will be implemented on August 7 to give sufficient time to customs and border protection to make the necessary changes to collect the new rates.
Canada’s tariffs are an exception: they will take effect on Friday.
Trade agreements prevented the tariffs from subsiding even more
The only major commercial partners who did not see changes in varying rates on Friday were the United Kingdom, China and Mexico. Trump signed a commercial structure with the UK and China.
However, the agreement signed with China expires in less than two weeks, which means these tariffs may increase soon.
With Mexico, Trump had threatened to increase rates to 30% to 00h01. But after a conversation with Mexico President Claudia Sheinbaum on Thursday, he extended Mexico’s previous tariff rate for another 90 days.
During the last month, Trump announced some other trade agreements. It is unclear if they will be finalized, but it seems that these countries may have avoided rates above what is in their agreements.
For example, European Union goods were scheduled to face 30%rates. The agreement reached over the weekend, however, provides 15% rates for most goods. This is the same rate at which the goods of South Korea and Japan will be taxed.
This is even higher than the 10% rate at which goods have been charged since April.
Are these fares really cool?
This is an issue being actively debated. Trump cited the International Emergency Economic Powers Law to impose specific tariffs per country.
In May, the International Court considered that Trump exceeded his legal authority in doing so. The oral arguments for the administration’s appeal began on Thursday, and a panel of judges seemed skeptical of Trump’s power to charge tariffs using these emergency powers.
A particularly problematic issue was the unprecedented use of IEEPA to charge tariffs, especially since the law makes no mention of tariffs to start.
Several judges also questioned Trump’s logic behind the statement of an economic emergency. The president earlier stated that US commercial deficits with other countries, that is, when the US import more than export, deserve a national economic emergency that requires correction tariffs.
However, Judge Raymond Chen asked, “Can the commercial deficit be an extraordinary and unusual threat when we had commercial deficits for decades?”
It may take weeks, or even months, before the court of appeals reaches a verdict.
After that, it can still be contested before the Supreme Court. Regardless of the end result, Trump has several tools available to implement new rates and maintain many of the existing ones.
Will Trump extend your tariff deadline again?
Technically, he did it. The new rates should come into force on Friday-and will now come into force mainly on August 7.
However, the president did not give any indication that he will pause these tariffs again.
However, he already said that about previous tariff deadlines, just to extend them later. In short, all, including the rates that have just come into force, is subject to changes with the publication of a social truth post.
Haven’t we been here before?
Tariff changes evoke Trump’s “Liberation Day” in April, when he similarly increased taxes on imports in a widespread way. The measure threw the financial markets in chaos and fueled fears of a global recession.
Trump ended up postponing “reciprocal” tariffs from April hours after they entered into force, subsequently established August 1 as a new deadline for commercial agreements under penalty of higher varying rates.
The president informed some countries which fees would face that day in the absence of new agreements, but apparently left other nations without information.
Are rates causing inflation?
Inflation remained relatively controlled during the previous rounds of Trump tariffs, but this may change with the entry into force of higher rates. Companies like Procter & Gamble and Walmart have already indicated that rates related to tariffs are underway.