Global trade markets remained at the edge on Thursday as the US prepares to implement mutual tariffs.
US President Donald Trump has already announced sharp trade tariffs on many of the country’s largest trading partners, despite dozens of countries scrambling to secure last-minute deals or extensions for negotiations beyond the deadline on Friday, August 1st.
The Friday deadline comes more than 120 days after President Trump’s administration first announced the global tariff barrage on the so-called “liberation day.”
Despite some delays in imposing tariffs since Trump took office in January this year, his administration appears to be ready to roll out new tariff rates in countries that cannot win trade contracts by the end of today.
So, what will happen tomorrow? Which countries do you already trade in bags? And who wants to save the last minute deal?
What will happen on August 1st?
As the clock ticked through August 1, the substantial round of mutual tariffs on imports from various US countries marks a pivotal moment in the world’s trade dynamics, experts say.
Trump has asserted that he will not extend this deadline. “The first deadline for August is the first deadline for August. It’s strong and will not be extended. It’s a big day for America!!!” Trump posted Wednesday on his social media platform, Truth Social.
Therefore, in midnight Eastern Time tonight, the US Customs and Border Protection will begin implementing these new obligations. These new missions can be 15% to 50% or even higher, in some cases, depending on the trading partner, the nature of the goods being traded, and whether the US has a specific contract.
Additional sector tariffs apply to certain industries. For example, in most countries, 50% tariffs apply to copper, steel and aluminum, while 20% tax applies to pharmaceuticals.
The White House confirmed Trump will sign a new executive order on Thursday, and officially imposed all these higher tariffs. Winners may include some of the largest trading partners in the United States, including Mexico, Taiwan and Canada.
Many countries facing new tariffs on all exports to the US could face immediate economic impacts, along with potential changes in diplomatic relations.
Tariffs can also cost the US economy. In its latest analysis, Yale Budget Lab, the Center for Non-partisan Policy Research, noted that overseas trade tariffs could cost households that average $2,400 in 2025 due to high prices for imported goods.
Meanwhile, industries that rely on imports of electronic devices, medicines, clothing and more may have to deal with the disruptions of new supply chains as businesses rush to absorb costs or pass them on to consumers.
Why is Trump launching all these new tariffs?
In April, Trump announced the “liberation day” tariff strategy, declaring a “national emergency” when he imposed a baseline tariff of 10% on all imports and then a higher country-specific “mutual” tariff.
The United States has massive trade obstacles with many countries, and Trump believes it is deeply unfair.
Thus, the Trump administration has justified that it is necessary to rectify these trade imbalances to boost US manufacturing and employment, despite economists pointing out that the deficit is not a direct evidence of unfair trade practices.
Beyond trade, experts note that the Trump administration is leveraging these tariff threats, curbing immigration, combating the opioid and fentanyl crisis, and looming allies and partners with their allies and partners on geopolitical issues regarding energy relations with India.
At its last minute deadline to the August 1 deadline, Trump’s administration will have strong armed trading partners, including Japan, the European Union, Indonesia and the Philippines, in a new deal that will accept US tariffs in exchange for their ongoing market access and investment commitments.
Who is already trading with the US in bags?
european union
The EU has agreed to a 15% tariff on the majority of exports to the US, including automobiles and drugs, in exchange for a zero tariff on its commitment to purchase some US exports and increase investments. Initially, Trump was threatening a 30% rate.
Japan
Japan has secured a 15% mutual tariff on goods exported to the US, reducing its threatened 25%, and Japan has pledged to invest $5500 billion in the US economy.
England
The UK has agreed to a 10% tariff rate on exports to the US. It also received 25% divisional duties on steel and aluminum. Half of 50% is charged on other countries.
South Korea
In return for a $3500 billion investment pledge and zero tariff on US exports such as automobiles and agricultural products, South Korea’s imports will receive a 15% 15% tariff on imports into the US.
Indonesia
Indonesia negotiated a 19% tariff on exports to the US from 32% threatened by purchasing US Boeing aircraft and pledging to remove or reduce trade barriers.
Vietnam
Vietnam has agreed to a 20% tariff on most exports to the US, and has agreed to zero tariffs on US imports like large vehicles, while also providing an additional 40% collection on “transshoot” goods (people entering the US elsewhere).
Philippines
The Philippines has agreed to a 19% tariff on exports to the US, with zero exports to the Philippines and commitment to strengthening military cooperation.
Pakistan
Although they signed a contract with the US to develop oil reserves, certain tariff charges for the products remain unknown.
Which large partners are trading?
Neither of the top three US trading partners, Mexico, Canada and China, had conducted trade transactions as of Thursday.
Mexico
It’s the top list of US trading partners driven by sectors such as vehicles, electronics and agriculture, with total trade of nearly $840 billion. With no new deals on August 1, existing tariffs on most imports will persist under trade war measures prior to 2025, with some exemptions under the US-Mexico-Canada Agreement (USMCA).
Canada
Second in terms of size is primarily energy, vehicles and aerospace products, which pass between the two countries for around $700 million. With the transaction not completed by the August 1 deadline, Trump threatened to impose a 35% tariff on non-USMCA-compliant items.
China
Third, among the US trading partners, Beijing trades about $532 billion with the US, focusing on electronics, machinery and consumer goods. Due to no permanent transactions, a total 30% tariff will be applied following the suspension agreed until August 12th. It followed a previous escalation to a 145% tariff on imports.
Who wants a last minute deal?
India
Even a “very good friendship” with Washington could not save India, the world’s most populous country and the fourth largest global economy.
On Wednesday, Trump announced a 25% tariff on all Indian goods exported to the US and an unspecified penalty to purchase energy from Russia as trade contract negotiations remain unresolved.
Total trade between the US and India was valued at around $130 billion in 2024, with exports to the US to the US worth $41.8 billion and imports from India worth $87.4 billion, a trade deficit that Trump does not ignore.
“India is our friend, but over the years we have not had a relatively small business with them because their tariffs are too high,” Trump wrote on his true social platform.
Then in another post, Trump said, “I don’t care what India is doing with Russia. They can bring their dead economy down together for everything I care about.
“We have little business with India. Their tariffs are the highest in the world. Similarly, Russia and the US have little business,” he writes. “Let’s keep it that way.”
In a statement, the Indian government said it was studying the implications of these new tariffs, adding that “India and the US have been engaged in negotiations over the past few months by entering into fair, balanced and mutually beneficial bilateral trade agreements.”
The statement further stated that “we are committed to that goal.” New Delhi signaled its belief that the government is a potential barrier to transactions by noting that it “attachs the utmost importance to protecting and promoting the welfare of farmers, entrepreneurs and MSMEs.”
Pakistan
India’s neighbouring rival Pakistan saw its shares rise with the Trump administration before and after a military conflict with New Delhi earlier this year.
Trump has revealed that the US has signed a contract with Pakistan. Pakistan will cooperate in developing oil reserves, but did not announce tariffs. “Who knows, maybe they’ll sell oil to India one day!”
Taiwan
Taiwan is also facing a high stakes deadline, with the proposed tariff set at 32%, excluding semiconductors, if no transactions are made by August 1.
Taiwanese officials are engaged in intense negotiations in Washington, spanning four high-level rounds led by Deputy Prime Minister Chen Lichun and US counterparts, addressing not only tariff technology but also non-wage trade barriers, investment and market access. These consultations reportedly have been pending approval.
Who has little hope of reaching a deal with the US?
Brazil
The country faces the most punishing tariffs among its major US trading partners, with President Trump officially issuing a 50% mutual tariff on Brazilian imports.
The US actually operates a trade surplus of nearly $7.4 billion with Brazil. But Trump is unhappy with the prosecution of former President Jae Bolsonaro, who is facing a trial that allegedly attempted a coup to overturn election losses in 2022.
Trump announced the issue on July 10th, calling the trial, which was announced directly on the issue a “witch hunt” and “an international stigma,” linking the imposition of a 50% tariff on Brazilian imports.
The Brazilian government responded with caution. President Lula has denounced Trump’s actions as “economically frightening,” and negotiations are stagnating.
At a press conference held in Washington this week, IMF chief economist Pierre Olivier Gou Rinchas called for an end to the trade war.
“Restoring the stability of trade policy is essential to reducing policy uncertainty. It urges all parties to resolve trade disputes and agree to a clear and predictable framework. Collective efforts must be made to restore and improve the global trading system.”
