President Donald Trump’s administration has said higher rates will come into effect on August 1. This is where trade negotiations take place.
US tariffs will come into effect on August 1st
The president said most tariff transactions should take place by July 9th, but not valid until August 1st.
US consumers are here a few more weeks before they feel the full power of President Donald Trump’s tariffs after extending the deadline for negotiations on sweep tariffs announced months ago.
In April, Trump announced tariffs of 10% baseline and targeted tariffs in dozens of countries. After stocks stopped and bond markets rebelled, Trump reversed the course, suspending sweep tariffs for 90 days, and gives the country the country to negotiate fees until July 9th. A flat 10% rate was effective.
However, the goal post on July 9th was pushed back. Commerce Secretary Howard Lutnick signed the executive order on July 7, in charge of the new deadline as Trump is set to begin on August 1.
“I think we’ve carried out most countries by July 9th, either letters or deals,” Trump said on July 6th. By July 7, Trump had posted letters to leaders from various countries like Japan and South Korea, and issued warnings of tariffs and further increases in the US.
This is where the country’s trade transactions stand so far.
Where are the tariffs today?
After announcing a 90-day suspension at tariffs on April 2, the Trump administration said it would use its time to launch dozens of transactions with trading partners.
“We’re planning to do 90 transactions in 90 days. It’s possible,” White House trade adviser Peter Navarro said in April.
So far, the Trump administration has announced two trade deals.
- In May, Trump announced his contract with the UK. A 10% baseline tariff on UK imports remains in effect under the transaction, with automobile and steel tariffs being reduced. In return, the UK will open an estimated $5 billion in US beef, ethanol and machinery.
- On July 2, Trump said he had secured a trade deal with Vietnam. The US will implement a 20% tariff on imports from the country, but Vietnam will allow the US to “sell our products to Vietnam with zero tariffs,” according to the Truth Social Post. Details have not been disclosed yet.
The US and China have also agreed to lower tariff rates during the 90-day suspension.
The administration has suggested more deals on the horizon in ongoing debate.
According to Reuters, Maros Sevkovic, the EU’s top trade negotiator, recently met with Washington officials and said the Japanese government had made a “detailed exchange” with Lutnick in early July. Reuters said talks with South Korea will also continue for the week of July 7th.
Treasury Secretary Scott Bescent told CNBC on July 7 that the administration will make a “number” trade announcement within the next 48 hours.
“I think what President Trump is worried about is not the quantity, but the quality of the deal,” he said.
Trump is threatening countries along BRICS
On July 6, Trump said countries in line with BRICS policies could face an additional 10% tariff. Countries include Brazil, Russia, India, China, South Africa, Iran, Ethiopia, Egypt, Indonesia and the United Arab Emirates.
The Trump threat comes shortly after the country issued a joint statement warning that tariffs could undermine global trade. The country also condemned military strikes against Iran.
What does this mean to Americans?
Because imports from US companies pay Trump’s tariffs, economists warn that US consumers are more likely to see higher prices as businesses hand those higher fees to customers.
Federal Reserve Chairman Jerome Powell said last month he expects more price increases this summer after tariffs have spent more time through the distribution chain.
“The tariffs will have to be paid, and some of them will fall to the end consumer,” he said. “That’s what businesses say. …So we know it’s coming.”
Trump sends customs letters to the country
When it appeared in CNN’s “Status of the Union” on July 6, Bessent said that if the US has not reached an agreement, the US will send a letter threatening to raise tariffs.
“I say that if things don’t move, I’m going back to the tariff levels of April 2 on August 1st,” Bescent said.
The April 2nd tariffs were where they stood for some of the country’s biggest trading partners.
- European Union: 20%
- Japan: 24%
- Korea: 25%
- India: 26%
- Taiwan: 32%
The letter began to occur on July 7th. That afternoon, Trump shared a letter threatening 25% tariffs on goods from Japan and South Korea from August 1st if the country does not agree to the trade agreement.
According to the Department of Commerce, 4.9% of US machinery and machinery and equipment imports came from South Korea as of 2022, with 8.3% of transportation equipment and 4.9% of basic metals, iron, steel and tools. US imports from South Korea totaled $115.4 billion, up 21.3% from the previous year.
Regarding Japan, the country accounted for 6.2% of US machinery and machinery imports in 2022. That year, almost 4% of the total US exports were sent to Japan, while 4.6% of the total US imports came from Japan.
Trump has revealed new tariff charges for goods from more countries, including:
- 25% tariff rate for Malaysia and Kazakhstan
- South Africa’s 30% tariff rate
- 40% tariff rate for Laos and Myanmar
White House spokesman Karoline Leavitt said dozens of additional letters will be sent in the coming days.
(This story has been updated to add new information)
