The tariffs on US President Donald Trump are scheduled to come into effect on August 1st. They show a major escalation of US trade policy, increasing consumer prices and greater financial hits for businesses.
Trump initially postponed the “mutual tariffs” announced on April 2nd, giving the country time to reach a trade deal with the United States.
On Sunday, U.S. Secretary of Commerce Howard Lutnick said the August 1 tariffs were “a tight deadline.”
What are the customs duties for August 1st?
Some countries face many tariffs on August 1st. The situation remains dynamic, but different taxation will clash with countries ranging from 15% in Japan and the European Union to 50% in Brazil.
Who launched the last minute deal?
Trump has attacked a series of bilateral trade contracts in recent days.
With the EU, the US has secured $7500 billion in energy purchases and reduced steel tariffs through quota systems. In exchange, car rates were reduced from 30% to 15%, and the same percentage was applied to pharmaceuticals and semiconductors.
Japan has committed $5500 billion in investments targeting US industries such as semiconductors, AI and energy, increasing rice imports under a 100,000 tonnes of tax-free quota. They also purchase US products such as ethanol, aircraft and defense products.
Indonesia reportedly agreed to increased tax-free access for many US products and energy and agriculture imports, but Jakarta has so far confirmed tariff reductions and major product purchases.
The UK has won aerospace and automobile export benefits, while simultaneously granting US tax-free beef quota and 1.4 billion litres of ethanol quota.
China saw its mutual tariffs reduced from 145% to 10% baseline and imposed on all countries. Additionally, there is a punitive tariff of 20% on fentanyl trafficking. The final tariff rate temporary suspension was extended until August 12th, with the two launching a deal. China eased cuts and relaxed non-tariff measures, resumed rare earth exports and accepted Boeing’s delivery.
The deal with the Philippines, Cambodia and Vietnam also includes tariff adjustments and access to the market, but not all terms have been confirmed by these governments.
Which sectors do you expect to be hit by the worst?
The first quarter revenue season saw carmakers, airlines and consumer goods importers suffer the worst hit by tariff threats, according to Tracker, a Reuters news agency that looks at how businesses respond to Trump’s tariff threats.
Taxation of aluminum and electronic devices such as semiconductors has led to increased costs.
“If you start looking at tariffs of more than 20, you reach a point where companies may halt imports entirely,” Joseph Hoody, a professor of economics at the Stern School of Business at New York University, told Al Jazeera.
“Companies simply postpone key decisions, delay employment, and reduce economic activity,” Foudy added.
Economists widely agree that the impact of previous tariffs has not been fully felt. Many companies have built stockpiles of stock in advance to ease rising costs.
An analysis published last month estimates that the BBVA study currently includes US tariff levels (including US tariffs including 10% obligations in almost every country, and higher collections of automobiles and steel also slows economic growth, reducing global GDP by 0.5 points in the short term and reducing points by more than 2% over the medium term.
Has the price increased?
Imports fell slightly as prices for imported goods in the US saw a modest seasonal decline until early March, according to a report from HBS’s Pricing Lab. The US’s first 10% tariff (February 4) on Chinese goods had little effect, but prices did not rise after more tariffs were imposed, including a 25% tariff on Canadian and Mexican imports and an additional 10% tariff on China. The prices of imported goods rose by 1.2 points, while the prices of domestic goods rose by about half.
Import prices skyrocketed after the 10% global tariffs were announced on April 2nd, and after the “liberation date,” 145% was announced in China on April 10th. A short price drop followed the tariff rollback on May 12th, but by June the trend resumed. Overall, import prices have risen by about 3% since March. It’s small compared to the tariff rate in the headline.
Did you bring money for customs?
Trump’s tariffs brought revenues from higher obligations paid by importers. From January 2nd to July 25th, US Treasury data shows that the US generated $124 billion from tariffs this year. This is 131% more than last year’s same time.
In early July, Treasury Secretary Scott Bescent said this could grow to $300 million by the end of 2025 as collections accelerated from Trump’s trade campaign.
