Analysts believe that Trump's tariff policy is an unscrupulous unilateralist shock to global economic rules under the name of "America First".
August 1st marks the end of the moratorium period for the United States' "reciprocal tariffs". But with only a few hours left until the deadline, the White House announced new "reciprocal tariff" rates.
According to an executive order signed by US President Trump on July 31 local time, US trading partners will face "reciprocal tariff" rates that are adjusted upward or downward. The new rates will take effect on August 7.
This also means that trading partners who have not yet reached an agreement with the United States still have seven days to continue their consultations with the Trump administration.
Analysis suggests that Trump is promoting a trade system he has conceived himself, which is more protectionist and isolationist than ever before.
Eswar, a professor of trade policy at Cornell University. Prasad said that this was "a dark day in the history of global trade integration, which was once regarded as highly promising to bring countries together under a vision of common prosperity."
The maximum tax rate is 41%.
According to the above-mentioned executive order, the US authorities will maintain the "comprehensive" tariff on goods imported into the United States at 10%, the same as the rate implemented on April 2.
However, the aforementioned 10% tax rate only applies to countries with which the United States has a trade surplus. A senior US government official said that this policy applies to most countries.
For countries that have a trade deficit with the United States, a 15% tariff rate will become the new lower limit of tariffs, and about 40 countries will apply this rate. For many of these countries, the new tariff rate will be lower than the "reciprocal tariff" rate announced on April 2nd, but for a few countries, it will be higher.
Some countries will have tax rates higher than 15%. The reasons are, first, that they have reached some kind of trade framework agreement with the United States, and second, that Trump has sent a notice letter explicitly demanding the application of higher tax rates. The above-mentioned senior official said that these countries are among the ones with the largest trade deficits with the United States.
As of the time of submission, the White House has determined that goods from 27 countries and regions will be subject to tariffs exceeding 15%, including: Canada 35%, Algeria 30%, Bangladesh 20%, Bosnia and Herzegovina 30%, Brunei 25%, Cambodia 19%, India 25%, Indonesia 19%, Iraq 35%, Kazakhstan 25%, Laos 40%, Libya 30%, Malaysia 19%, Moldova 25%, Myanmar 40% Nicaragua 18%, Pakistan 19%, the Philippines 19%, Serbia 35%, South Africa 30%, Sri Lanka 20%, Switzerland 39%, Syria 41%, Thailand 19%, Tunisia 25%, Vietnam 20%, Taiwan of China 20%.
The executive order also imposed an additional 40% fine on so-called transshipment. Transshipment refers to the process of transporting goods from high-tariff countries to low-tariff countries and then transshipment them to the United States.
The United States has imposed fines on Customs and Border Protection personnel for goods identified as transshipment. A senior US government official said that the 40% fine would be imposed on top of that.
In the coming weeks, the US government is expected to formulate rules of origin, clarifying which types of goods and contents are also subject to a 40% tariff.
The newly announced tariff rates in Cambodia, Vietnam, Indonesia, Malaysia and Thailand have all been significantly reduced.
Cambodian Prime Minister Hun Manet said that the tariff on Cambodian exports to the United States has been reduced from the original 49% to 19%, which is good news for the Cambodian people and economy. Cambodian Deputy Prime Minister and chief trade negotiator Sun Chanthol said that lowering tariffs would help prevent the collapse of the country's crucial garment industry.
In contrast, Switzerland's top tariff rate has reached 39%, a significant increase from the 31% proposed by the US government in April. The Swiss government expressed "great regret" over this.
As for Canada, one of the largest trading partners of the United States, its commodity tariffs have been raised from 25% to 35%.
According to a situation statement from the White House, the new tariff rates will come into effect on August 1. This tariff will cover all products not included in the US-Mexico-Canada trade Agreement. Goods that are transshipped to other countries to evade new tariffs will be subject to a 40% transshipment tax.
The White House said on the evening of July 31 that Trump raised tariffs on Canada because Canada failed to take action against the "public health crisis caused by fentanyl and illegal drugs crossing the northern border into the United States".
Canadian Prime Minister Mark Carney said he was "disappointed" with the decision. Canada has taken measures to strengthen border control. Canada accounts for only 1% of the United States' fentanyl imports.
Carney also posted on the social media platform X that the US tariff policy would severely affect the exports of wood, steel, aluminum and automobiles, and vowed to take action to protect Canadian jobs, invest in industrial competitiveness and diversify export markets.
He said that Canada will continue to negotiate with the United States, but is also committed to cutting trade barriers within the country to create new investment and make Canadians "our own best customers".
However, on the early morning of July 31, Trump posted on social media that he might not reach a tariff agreement with Canada as a punishment for his recognition of the Palestinian State's decision.
"Canada has just announced its support for the establishment of a Palestinian state," Trump wrote on his "Truth Social" platform. "This will make it very difficult for us to reach a trade agreement with them."
And US Commerce Secretary Howard. Lutnik said that if Carney "starts to show his charm and stops retaliating", Trump might reconsider tariffs.
The negotiation is progressing slowly.
This change in US tariffs reminds people of Trump's actions on April Liberation Day, when he also raised import duties across the board. This move plunged the financial market into chaos and raised concerns about a global economic recession.
However, he eventually postponed the "reciprocal tariffs" in April just a few hours after they took effect, and later said that August 1 would be set as the deadline for the new trade agreement.
According to the latest executive order, most tariffs will come into effect on August 7th. At that time, the average tariff rate in the United States will rise from the current 13.3% to 15.2%.
A senior US government official said that the reason for the need for a new effective date is to give the US Customs and Border Protection time to update the Harmonized Tariff Schedule for the implementation of higher tariffs.
It remains unknown whether Trump will extend the deadline for the tariff suspension period again.
In an exclusive phone interview with NBC News, Trump talked about the implementation of the new round of large-scale import tariffs, saying that everything was going "very smoothly and very steadily".
He also said that with only a few hours left until the deadline for his self-set trade negotiations, it is "too late" for the countries that have not yet reached an agreement, and it is impossible to avoid the new tariff rates that will take effect on August 7. However, he added that his door is always open to welcome attractive proposals.
From April 2nd, the "Liberation Day", to July 9th, and then to August 1st, many countries have been dealing with the postponement and recurrence of this trade turmoil. Trump once claimed that "more than 200 agreements" would be reached, and senior White House advisor on trade and manufacturing Navarro also said that "90 agreements in 90 days" could be achieved. However, after 120 days, the United States has only reached seven trade agreements, namely framework agreements with South Korea, the European Union, Japan, the United Kingdom, Vietnam, Indonesia and the Philippines.
The UK was the first to reach a framework agreement with the US, determining a 10% benchmark tariff on US exports and multiple quota exemptions. However, the reduction of tariffs on steel and aluminum and the abolition of the digital services tax are still under negotiation.
On July 2nd, Vietnam reached an agreement to reduce its export tariffs on the United States from 46% to 20%, but the details of the tariffs on goods transferred from third countries remain unclear.
Indonesia reached an agreement on July 15th, reducing its export tariffs on the United States from 32% to 19% and committing to removing tariff barriers on over 99% of US goods exported to Indonesia.
The agreement reached by the Philippines on July 22nd shows that the export tariff on the United States will only be reduced from 20% to 19%, but zero tariffs will be imposed on US imports.
As a major economy in Asia, Japan reached an agreement on July 23rd to reduce its export tariffs on the United States from 25% to 15%, marking the first time that the automotive industry has been granted a lower tax rate. Meanwhile, Japan will invest 550 billion US dollars in the United States and open its markets for automobiles, rice and other goods to the US.
South Korea has reached terms similar to those of Japan, reducing comprehensive export tariffs and auto tariffs to 15%. Meanwhile, the United States has promised not to impose new restrictions on South Korean-made semiconductor and pharmaceutical products. South Korea has committed to investing approximately 350 billion US dollars in the United States (including 150 billion US dollars for ship cooperation) and purchasing about 100 billion US dollars worth of energy.
After lengthy negotiations, the European Union has determined that the benchmark tariff rate for goods exported to the United States will be 15%, and the tariff on automobiles will be reduced to 15%. However, it needs to invest an additional 600 billion US dollars in the United States and has committed to importing a total of 750 billion US dollars worth of energy from the United States over the next three years. The agreement was criticized by some member states.
It is still unclear whether these agreements will eventually come into effect, but it seems that these countries may have avoided tax rates higher than those stipulated in their agreements.
In terms of negotiations with China, China and the United States held economic and trade talks in Stockholm, Sweden from July 28th to 29th local time. According to Xinhua News Agency, both sides agreed to continue pushing for the suspension of the 24% portion of the US "reciprocal tariff" and the 90-day extension of China's countermeasures as scheduled, once again sending an important signal to the world that the world's two largest economies hope to move towards each other.
This is the third economic and trade meeting held by the two sides within just three months after Geneva and London, continuing the unremitting efforts to build consensus through dialogue. Zhao Yongsheng, a researcher at the Institute of Regional and Country Studies of the University of International Business and Economics and a doctoral supervisor at Sorbonne University in Paris, told the International Finance News that if the Geneva talks were ice-breaking meetings, with the main task of implementing the consensus of leaders and establishing a negotiation framework, but without involving specific details, the London framework is a further refinement based on the Geneva talks. The China-Us economic and trade talks held in Sweden this time, judging from the results, generally presented the characteristics of "in-depth, constructive and candid". The measure of suspending the 24% "equivalent tariff" agreed upon in the London talks has been renewed this time. Zhao Yongsheng said that China's corresponding countermeasures have also been continued simultaneously. This achievement is a "deferred" progress, which has bought a time window for subsequent negotiations.
Looking ahead, Zhao Yongsheng believes that the 90-day tariff suspension window period is crucial. During this period, technical-level consultations may be held to refine industrial cooperation plans.
Mexico has also been granted a 90-day negotiation window. On July 31 local time, Trump said through social media that he had met with Mexican President Claudia. Simbaum had a "very successful" phone conversation and agreed to extend the agreement that had been in place for some time in the next 90 days. The United States will continue to impose import tariffs ranging from 25% to 50% on steel, aluminum, copper, automobiles and other products from Mexico.
Abuse of power
On July 31 local time, in a subsequent statement regarding the executive order signed by Trump, the White House said: "After years of unsustainable trade deficits threatened the US economy and national security, President Trump is using tariffs as a necessary and powerful tool to implement the America First policy."
However, the global tariff policy proposed by Trump has been significantly questioned by the federal appellate court.
According to The Guardian, on July 31, a collegial panel of all 11 judges at the US Court of Appeals for the Federal Circuit heard whether Trump's "reciprocal tariffs" exceeded legal authority and were suspected of over-expanding the president's power. Judges have repeatedly questioned whether Trump has a legitimate reason to rely on emergency powers to unilaterally modify the US tariff schedule without consulting Congress.
The enterprises that filed the lawsuit accused the White House of orchestrating a "jaw-shaking" enforcement operation, which was quite different from any trade measures attempted by previous US governments over the past two centuries. A judge also pointed out that the International Emergency Economic Powers Act (IEEPA) on which Trump relied did not even contain the word "tariff".
Brett Shumate, the assistant secretary of the Civil Division of the US Department of Justice representing the government, told the court that "the government has been using the IEEPA," but also admitted that this was the first time the IEEPA had been used to enforce tariffs. He argued that the US trade deficit "has reached a critical point", prompting Trump to take urgent action, and pointed out that "this affects our military preparedness and also our domestic manufacturing capacity."
Neal Katyal, the lawyer representing the enterprise, said straightforwardly that Trump proposed "an astonishing power that no president has dared to assert in two hundred years." The executive branch is actually saying, "The federal courts are powerless. The president can do whatever he wants at any time as long as he declares a state of emergency."
As of the time of publication, the judge handling this case has not made any ruling. But no matter what the outcome is, the outside world expects the case to reach the United States Supreme Court all the way.
Trade law experts say that if the Trump administration wins in court, it will gain huge power to levy or exempt taxes on foreign companies and individuals with ties to the United States at will. If the government loses the lawsuit, the outlook for Trump's tariffs will become unclear.
Economists have warned that the shockwaves created by Trump's new version of "reciprocal tariffs" will have a profound impact on the world economy and trade in the coming years. Especially, it will deal an even greater blow to Asian economies.
According to the updated content of the World Economic Outlook Report released by the International Monetary Fund (IMF) on July 29 local time, current global economic activities have been distorted to a certain extent due to expectations of significant tariff hikes. In the next two years, economic policy uncertainties will continue to threaten the stability of the world economy. The IMF emphasizes that practical cooperation among economies is of vital importance and efforts should be made to reduce trade and investment barriers.
In response to the US government's excessive imposition of tariffs, on August 1st, Chinese Foreign Ministry Spokesperson Guo Jiakun said at a regular press conference that China's position against the excessive imposition of tariffs is consistent and clear. There are no winners in tariff wars or trade wars, and protectionism harms the interests of all parties.