As President Donald Trump’s new tariffs went into effect last night, crushing levies were placed on imports from almost 70 different nations. These tariffs, which range from 10% to 41%, are a key element of the administration’s strategy to force a radical restructuring of international trade norms. As per usual, the implementation was announced with little warning on the president’s social media platform of choice, just before midnight. He jubilantly announced, “IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS JUST STARTED FLOWING INTO THE UNITED STATES OF AMERICA!”
The tariffs targeted a large number of countries, but none more than Brazil, which faced a 50% total tariff rate. This includes a 40% tariff plus a 10% baseline tariff. Other countries suffering from elevated tariff rates are Laos and Myanmar at 40%, and Syria’s rate is 41%. Canada, which is the United States’ largest trade partner, will be hit by a 35% taxing on their exports.
Today, India is feeling the effects of a newly imposed 25% tariff. This rate is scheduled to increase to 50% on August 27. India’s continued purchase of Russian oil fuels this surge. In retaliation, the Trump administration has raised the stakes and imposed a 25% levy on these cross-border deals, as punishment for engaging in them.
According to the Yale Budget Lab, these tariffs are a regressive policy that will hurt the average American household. An average family will pay $2,400 more this year than before. This new, massive fiscal burden supports the administration’s aim at a more macro level. They seek to build a more “transparent and inclusive” “new system of trade,” focused on “fair and balanced trade.”
The Trump administration delayed the implementation of these tariffs over and over. They then extended the deadlines to July 1 and August 1. During his administration, President Trump sought to negotiate better terms by sending letters to the leaders of roughly two dozen countries. He outlined the troublesome specific tariff levels that would go into effect should they not come to terms.
And finally, you’re dealing with higher tariffs through many of your largest trading partners. In addition, new subject-specific levies place 15% tariffs on goods from a number of other countries, including Bolivia, Ecuador, Ghana, and Iceland. These are the exact types of steps that the Trump administration used to intensify pressure on foreign governments. Their intent was to put pressure on these countries to enter into better trade deals.
Karoline Leavitt, a spokesperson for the Trump administration, emphasized the intent behind these tariffs: “The president and his trade team want to cut the best deals for the American people and the American worker.”
The administration has successfully reached preliminary trade agreements with several nations, including the United Kingdom, Vietnam, Indonesia, and China. These treaties, known as Trade Promotion Agreements, are considered by the Obama administration as key steps taken towards building a more accommodating global stage for American products and services.
Notably, goods shipped by August 7 and entering the United States by October 5 will not be subject to the new tariff rates. This provision is a big boost to businesses and consumers looking to get used to new technologies as fast as possible. It provides companies with an opportunity to adjust to the new trade environment.
