Almost 4 months after Liberation Day sparked a global market crash, moments ago T-Day finally arrived... and barely anyone noticed.
Late on Thursday, just ahead of the August 1 deadline for tariff renegotiation, President Trump announced a slew of new tariffs, including a 10% global minimum and 15% or higher duties for countries with trade surpluses with the US, forging ahead with his unprecedented effort to reshape international commerce.
First, the silver lining: baseline rates for many trading partners remain unchanged from the duties Trump imposed in April, which may ease investors’ worst fears - although with the S&P sitting at record highs it is difficult to claim anyone had any fears about anything - after the president had previously said they could even double. Yet Trump's decision to raise tariffs on Canadian goods to 35% threatens to inject fresh tensions into an already strained relationship.
Trump signed the new tariff directive just hours before his prior Aug. 1 deadline for higher tariffs to kick in on scores of trading partners. As Bloomberg reports, most tariffs will take effect after midnight on Aug 7, to allow time for US Customs and Border Protection to make necessary changes to collect the levies.
Taken together, the result will be significantly higher tariffs on goods from almost all US trading partners. The average US tariff rate will rise to 15.2% if rates are implemented as announced, according to Bloomberg Economics, an increase from 13.3%, and significantly higher than the 2.3% it was in 2024, before Trump took office.
Major industrialized economies, including the European Union, Japan and South Korea, accepted 15% duties on their products, while charges on items from Mexico, Canada and China are even bigger.
Today's announcement notwithstanding, Trump is expected to unveil separate tariffs on imports of pharmaceuticals, semiconductors, critical minerals and other key industrial products in the coming weeks. Other details are also forthcoming, including so-called “rules of origin” to decide which products are transshipped, or routed through another country, and thus would face at least a 40% rate, a senior US official told Bloomberg, adding that a decision will be made in the coming weeks. The senior US official said there is no date yet when revised auto tariff rates would be implemented.
Thursday’s order was signed behind closed doors without the fanfare of Trump’s April tariff rollout, during which he brandished placards with rates during a Rose Garden event. Since then Trump has faced criticism for overpromising on trade deals after he and aides vowed to broker numerous agreements, with at least one pledging “90 deals in 90 days.”
In the end, imports from about 40 countries will face the new 15% rate and roughly a dozen economies’ products will be hit with higher duties, either because they reached a deal or Trump sent them a letter unilaterally setting import taxes. The latter group has the highest goods-trade surpluses with the US.
Some of those were expected, such as a 25% levy on Indian exports that Trump announced this week on social media. Others included charges of 20% on Taiwanese products and 30% on South African goods. Thailand and Cambodia, two countries that were said to have struck a last-minute deal, received a 19% duty, matching rates imposed on regional neighbors including Indonesia and the Philippines. Vietnam’s goods will be tariffed at 20%, according to the WSJ.
Trump’s deals with the EU, Japan and South Korea would lower duties on their vehicle exports to 15% from the general rate of 25%.
In a separate order, Trump followed through on his threat to hike tariffs on exports from Canada, one of the US’s largest trading partners, from 25% to 35% for goods that do not comply with the U.S.-Mexico-Canada Agreement. That change excludes goods that are covered under the North American trade pact he negotiated in his first term. That stood in contrast to the 90-day extension Mexico received to negotiate a better agreement. Earlier in the day, Trump wrote on Truth Social that he agreed to extend for 90 days the existing tariffs on Mexican goods. He said a 25% fentanyl tariff, a 25% tariff on cars and a 50% tariff on steel, aluminum and copper would remain in place.
Still other nations are set to be hit with even higher tariffs. Trump has pledged to hike tariffs to 50% on Brazil over its digital policies and legal action against former President Jair Bolsonaro, a Trump ally.
The lower 10% and 15% rates are expected to apply to a wide range of mostly smaller- and medium-sized economies that Trump showed little interest in bargaining with one-on-one. He had signaled in recent days there were simply too many countries to cut individualized deals with all of them. Some smaller states, however, were hit with the highest rates, including Syria at 41%, as well as Laos and Myanmar and 40% each, both preferred hubs of Chinese transshipments.
The tiny African nation of Lesotho, however, which had been reeling from Trump’s threat in April to impose a 50% duty, instead received a 15% rate. That change puts the landlocked mountainous kingdom at an advantage against the far larger country that entirely surrounds it, South Africa.
One big exception from this week’s deadline is China, which faces an Aug. 12 deadline for its tariff truce with the US to expire. The Trump administration has signaled that is likely to be extended. No final decision has been made but the recent US-China talks in Stockholm were positive, the official said.
There were signs that Trump’s order took some partners by surprise. Taiwan’s cabinet said in a statement its rate was temporary, and that the US levy is expected to be reduced after more talks, which had been delayed by scheduling conflicts.
The announcement brings to a close, at least for now, months of wait-and-see about how Trump would set his country-based tariffs, which he billed as the centerpiece of his plan to shrink trade deficits and revive American manufacturing. Trump twice delayed his so-called reciprocal tariffs, first announced in April, to allow time for negotiations, first after markets panicked and then as foreign governments bargained to get better terms from the US.
“U.S. customs officials will face challenges implementing the EO, particularly with the different tariff rates now applied across the world,” said Wendy Cutler, a former US trade negotiator. “The seven day breathing period before implementation will help, but importers should expect start up problems at a minimum.”
Some analysts were worried that today's announcement will spark another round of selling similar to the post-Liberation day dump. “The reality is that we’re still going to see higher tariffs than pre-Liberation Day and we’ll start to see some economic impact of that in the months ahead,” said Shane Oliver, a Sydney-based chief investment officer at AMP Ltd. “There’s still uncertainty about China, Mexico has been delayed by another 90 days and details around sectoral tariffs are also yet to come.”
Others just can't wait to move on: “With the biggest economies having either already made a deal, had a postponement or been hit with another tariff hike that will probably be eventually negotiated lower (Canada), many traders seem to prefer to keep the focus on US NFP as the next likely catalyst for broad USD movement,” said Sean Callow, a senior analyst in Sydney
“I would have thought 10% baseline tariff was a positive surprise for risk, worth at least a little bounce on Aussie and the like, given Trump’s recent comments have referred to 15% or higher” Callow said, adding that “perhaps the main uncertainty had already been removed on the likes of South Korea, Japan, India and, for now, China.”
Asian stocks came under pressure after Trump announced the new rates, with the MSCI Asia Pacific Index dropping 0.5%, led by losses in South Korea and Taiwan. Futures on the S&P 500 slipped 0.1% while those for European stocks retreated 0.4%. The Taiwan dollar and Korean won led declines in currency markets, while the Swiss franc edged lower after the nation’s products were hit with a 39% charge, one of the few nations that saw its rate go up. The Canadian dollar held steady in the face of higher rates.