President Donald Trump has issued an executive order that imposes new tariffs on many of America’s trading partners, a move he asserts is part of his administration’s “America First economic policies.” The announcement comes as the administration has increasingly turned to attempts to reshape trade dynamics and strengthen U.S. manufacturing. There had been initial hopes that the tariffs would be rolled out this Friday, but they are currently scheduled to take effect in seven days.
The executive order establishes a clear framework for the tariff structure, which affects almost 70 countries. Tariff rates are all over the place, beginning at 10% and going as high as 41%. Countries not explicitly mentioned in the order will automatically incur a 10% tariff on goods exported to the United States. As a particularly promising sign, countries such as Bolivia, Ecuador, Ghana, and Iceland will be subject to an extra 15% tariff. Laos and Myanmar will be hit especially hard by having the maximum tariffs imposed at 40%. In the meantime, Syria will have the highest tariff rate, at 41%.
Japan’s tariff rate is being reduced by 9 percentage points, from 24% to 15%. At the same time, Vietnam is reducing its rate from 46% to a far more realistic 20%. Canada and Brazil are next in line for the new tariffs. In Brazil, imports will face a sudden and dramatic increase in imports, facing a total combined import tariff rate of 50% (including a previously announced 40% tariff). As a result, Canada will face a 35% tariff and India will face a 25% tariff on its exports.
In fact, over the past few months, President Trump has made it a point to call for something called “fair and balanced trade.” In April, he was first to introduce reciprocal tariffs. He kicked their implementation down the road in favor of negotiating 90 trade deals in a 90-day window. Mexico got a stay of execution from the threat of reciprocal tariffs that would have slapped a 30% tariff on Mexican goods. It will still face a punitive 25% tariff on all consumer goods, in addition to sector-specific tariffs targeted at cars, aluminum, and steel.
The administration has framed these tariffs as a strategy to stimulate economic growth, citing their potential to “spark trillions of dollars in new investment in U.S. manufacturing, technology, and infrastructure.” White House press secretary Karoline Leavitt reinforced this perspective, stating that “the president and his trade team want to cut the best deals for the American people and the American worker.”
Ship the goods by August 7, but ensure that they clear customs and enter into the U.S. marketplace by October 5. If you get those products excluded, then they don’t suffer under these new tariff rates. This grace period will provide importers a much-needed period of relief. It allows them sufficient time to recalibrate their logistics and readjust to the new regulatory landscape.
