Trump declares retaliatory tariffs to commence this week
Following President Trump's executive order on July 31, 2025, the reciprocal tariff rates for individual countries have been modified and took effect on August 7, 2025. These updated rates range mostly between 10% and 41%, replacing the earlier baseline 10% tariff and the country-specific rates announced on April 2, 2025.
Baseline Tariff
Countries not listed in Annex I of the July 31 executive order are subject to a 10% reciprocal tariff. This baseline rate applies to countries such as Algeria, Angola, Bangladesh, Bolivia, Bosnia and Herzegovina, Botswana, Brunei, Cambodia, Cameroon, Chad, Fiji, Ghana, Guyana, Iceland, India, Indonesia, Iraq, Israel, Japan, Jordan, Kazakhstan, Libya, Liechtenstein, Madagascar, Malawi, Malaysia, Mauritius, Moldova, Mozambique, Myanmar (Burma), Namibia, Nauru, New Zealand, Nicaragua, Nigeria, North Macedonia, Norway, Pakistan, Papua New Guinea, Philippines, Serbia, South Africa, South Korea, Sri Lanka, Switzerland, Syria, Taiwan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Uganda, Vietnam, Zambia, and Zimbabwe.
Annex I Countries
Detailed country-specific rates were set for Annex I countries, reflecting bilateral trade relationships and recent trade or security negotiations. For example, the United Kingdom secured the lowest reciprocal tariff at 10%, matching the baseline rate. The European Union uses a two-tier system: goods with existing U.S. tariff rates above 15% under Column 1 are subject to a 0% reciprocal tariff, while goods with existing rates below 15% are charged an adjusted rate of 15% minus the existing duty.
Special Cases
Canada's rate was increased to 35%, citing agricultural and enforcement issues. Brazil received a 50% reciprocal tariff, reflecting political and trade concerns. Notably, China, Canada, and Mexico are not included in Annex I. Imports from these countries are subject to additional tariffs under separate executive orders.
Transit Exemptions
Goods from Annex I countries that are loaded onto a vessel and in transit before the tariffs take effect on August 7 will not be subject to the new tariffs if imported before October 5. However, any article CBP determines has been transshipped to evade the reciprocal tariffs shall be subject to an additional duty of 40%.
Negotiations and Exclusions
Between April 2 and July 31, several countries negotiated trade/security agreements, which influenced the revised July 31 rates, reflecting either lower or higher tariffs than initially announced depending on the outcomes of negotiations. The revised rates for certain countries reflect discussions the Administration had with various countries during the suspension period. As of August 3, 2025, the Administration has announced deals with the European Union, Indonesia, Japan, Philippines, South Korea, United Kingdom, and Vietnam.
The Administration is closely monitoring developments with respect to the reciprocal tariff regime and is prepared to advise clients on how to navigate and mitigate the effects of these tariffs. On July 31, the United States and Mexico agreed to extend their negotiations for 90 days.
In summary, the July 31 executive order updated and in some cases increased reciprocal tariff rates from those set or paused after April 2, 2025, reflecting shifting trade negotiations and policy evaluations, effective August 7, 2025. Countries without specific agreements remain generally under a 10% tariff, while others face rates tailored to reciprocal trade imbalances and political considerations.
- The baseline tariff of 10% applies to countries like Algeria, India, and South Africa that are not listed in Annex I, while the United Kingdom secured the lowest reciprocal tariff of 10% due to recent trade negotiations.
- In contrast to the United Kingdom, Brazil was given a 50% reciprocal tariff due to political and trade concerns, and China, Canada, and Mexico, who are not included in Annex I, are subject to additional tariffs under separate executive orders.
- Countries such as the European Union and the Philippines have negotiated agreements with the Administration, which have resulted in revised tariff rates either lower or higher than initially announced, demonstrating the ongoing influence of business, politics, and finance on trade policy.
