OnAugust 1, 2025, President Trump signed an executive order (EO) imposing "reciprocal" tariffs ranging from 10% to 41% on imports from dozens of countries. This order came after a period of trade negotiations and threats of tariffs leading up to a self-imposed August 1 deadline.
Key aspects of the EO and related actions include:
Reciprocal Tariffs:The tariffs are described as "reciprocal" because they are designed to match the duties other nations impose on U.S. goods. The new rates were codified in Annex I of the EO and apply to over 60 trading partners.
Delayed Implementation (Mostly):While the original deadline for these tariffs was August 1, 2025, the implementation for most countries has been pushed back toAugust 7, 2025.
Baseline and Higher Rates:The EO sets a baseline minimum tariff rate of 10% for most trading partners. However, countries with which the U.S. has a trade deficit face a higher starting rate of 15%.
Specific Country Tariffs:
- Canada:Imports from Canada face a 35% tariff, increased from 25%, effective August 1st. This increase was cited as a response to Canada's failure to cooperate in curbing fentanyl trafficking and retaliation against previous U.S. actions.
- Brazil:Brazil's goods face a 10% reciprocal tariff, but an additional 40% levy, effective August 1st, was imposed due to the prosecution of its former president, Jair Bolsonaro, bringing the total to 50%.
- European Union: For goods with a Column 1 Duty Rate of the HTSUS of less than 15%, the sum of its Column 1 Duty Rate and the reciprocal tariff should be 15%. While goods with a Column 1 Duty Rate greater than 15% are subject to a 0% reciprocal tariff.
- India:India's US-bound exports will face a 25% tariff.
- Switzerland:Switzerland faces a 39% tariff.
- New Zealand:Exports from New Zealand to the U.S. are subject to a 15% tariff.
- Bangladesh:Bangladesh will face a 20% tariff on its goods.
- China:The EO outlines rates for many trading partners, but China's tariffs will continue to incur separate duties.
- Mexico: Trade talks between the U.S. and Mexico are extended for 90 days, pushing back the original August 1 deadline when a 30% tariff was set to take effect.
Transshipment: Articles transshipped to evade these additional duties will be subject to (i) a 40% tariff in lieu of the applicable duty rate listed in Annex I of the EO, (ii) any other applicable or appropriate fine or penalty, and (iii) any other duties, fees, taxes, exactions, or charges applicable to goods of the country of origin.
This EO represents a significant shift in U.S. trade policy, replacing a temporary suspension of tariffs with a system based on "reciprocal" rates for various trading partners.
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