The harsh new fares of US President Donald Trump over more than 90 countries came into force at midnight on Thursday (7), continuing the escalation in the global trade war that is already starting to charge its US economy price.
Few of the top US business partners have escaped the new rates, which raised the US average effective tariff at the highest level by almost a century. In the hours preceding the application of taxes, Trump made it clear that there would be more to come, reaffirming his strategy that shook markets, raised prices and caused seizure between consumers and companies worldwide.
Tariffs against Brazil came into force a day earlier:
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The news was announced in a series of decrees signed last week by the president – some formalized preliminary agreements recently negotiated with the European Union and other countries. Trump argues that these rates help to redefine business relationships considered unfair, generate new revenues for the government, stimulate national industry and achieve other goals.
In fact, tariffs have helped generate revenue – about $ 152 billion in customs collection by July, show recent data – but adverse effects are also visible. A growing number of companies warned that it may not support the increasing costs of essential imported components.
As a result, prices have already begun to rise. The last monthly inflation indicator showed that appliances, clothes and decoration items became more expensive in June. The economy continues to grow, but to an anemic pace, with analysts predicting little improvement by the end of the year. The labor market is also already in effect, with hiring slowly slowing down in July.
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For Olu Sonola, head of economic research at Fitch Ratings in the US, the effects of the rates announced in the spring are already beginning to appear. With the new taxes in force, he said, the Americans will see the impacts intensify in the coming months.
Tariffs start at 15%, applied to imports from countries such as Bolivia, Ecuador, Iceland and Nigeria. Others, such as Taiwan, are taxed by 20%. Argentina and Brazil are also on the even larger rate list: Trump has imposed 50% on some Brazilian products, such as retaliation for Brasilia’s decision to process Jair Bolsonaro – then Trump’s political ally – for trying to stay in power after losing elections.
On Wednesday (before implementation), the president announced that he would increase the rates about India to 50% by the end of August, in response to the purchase of Russian oil from the country. He also indicated that other countries may face similar sanctions as a way to press Russia to interrupt his war against Ukraine.
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In general, taxes do not apply to products that were already in transit. Goods shipped before Thursday will not be taxed as long as they enter the US until early October, making room for importers to increase their inventory before the highest rates affect their costs.
Several smaller countries have faced 10% tariffs since Trump announced and then suspended the first phase of their policies in April. Others have negotiated reserves and now pay rates between 15% and 20%, such as the EU (European Union), Japan, South Korea and Vietnam. These countries pledged to open their markets to US products and, in some cases, have promised to invest billions in the US, but the exact terms of these agreements have not yet been released.
On Friday, Trump imposed 35% of Canadian products that are not covered by the US-Mixico-Canada (USMCA) agreement. The application to Canada has had effect, while equivalent rates for Mexico were suspended while negotiations continue. As for China, taxes remain at 30%, according to the agreement between countries this year-but the truce expires on Tuesday.
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Thursday’s rates will hardly be the final chapter of this trade war, which faces various legal challenges in the federal courts. Trump still intends to impose taxes on imported medicines, chips and other foreign products.
On Wednesday, he mentioned that semiconductor rates would be defined by 100%, although they have not yet been officially announced. This announcement was made alongside Tim Cook, CEO of Apple, who promised to invest another $ 100 billion in the US. Trump indicated that the rates could be relaxed to companies that manufacture high technology chips locally.
The president also minimized the signs of negative impact on economics, stating that “the costs are very low” and that the country will have “unprecedented” growth. He had already claimed that foreigners would be the most affected by their fares and the week before resigned the head of the government’s employment report by stating without evidence that the data had been manipulated against him.
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According to Yale University’s Budget Lab, new tariffs raise the average US effective rate to more than 18%, an index not seen since 1934. For American families, this could mean an average increase of $ 2,400 in annual expenses. For the economy as a whole, it represents a reduction in production, with loss of a percentage point in growth from 2025.
For Mark Zandi, chief economist at Moody’s Analytics, tariffs can create an “stagflation-like” environment, that is, slow growth with high price-which would further complicate Federal Reserve work, especially now with Trump demanding interest rate cuts:
“Growth is slowing down. It’s already happening and will become much more evident.”
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So far, the American economy has managed to avoid the darkest forecasts of a recession. But many experts claim it was just a matter of time until tariffs had real and noticeable effects – mainly because many companies anticipated purchases before the highest rates arrived.
Matthew Martin, senior economist at Oxford Economics, explained that stocks have been reduced since the first announcement of tariffs in April. With the return of high rates, he said, prices tend to rise again:
“This will accelerate in the coming months.”
