Trump Signs New US Tariff Order

On July 31st, US President Trump signed an executive order imposing new tariff rates on various countries. New tariffs ranging from 10% to 41% are proposed for approximately 70 countries and regions. The new rates will take effect on August 7th. Japan’s tariff will be raised from the current 10% to 15%.

According to the executive order, the highest tariff rate is 41% for Syria, while the lowest is 10% for countries like the UK. Of the countries and regions that have announced new tariffs, more than half, including Japan, will be at 15%. Countries that have not yet announced new tariffs will all be subject to 10%.

According to a chart in the Nikkei, mainland China’s tariffs remain at the same level as when the new tariffs were announced in April: 34%.

The executive order also addresses “roundabout exports” to the US. For those who evade tariffs through roundabout exports, the tariff rate will be raised to 40%, with penalties and other measures.

Special measures have also been introduced for the European Union (EU). Products currently subject to tariffs below 15% will be subject to a 15% tariff. Products currently subject to tariffs exceeding 15% will not be subject to reciprocal tariffs and will remain subject to the original tariff rates.

The Japanese government’s statement indicates that, under the July 22 Japan-US agreement, Japan also applies the same mechanism as the EU. The presidential order released this week does not mention Japan’s application of this mechanism.

Automobile tariffs, due to their different legal basis from reciprocal tariffs, were excluded from this presidential order. As of the evening of July 31, the presidential order revising the 25% US auto tariff on Japan had not yet been issued, and the agreed reduction to a total of 15% between Japan and the US may be delayed until a later date.

After fully implementing reciprocal tariffs on April 9, the Trump administration decided to suspend some tariffs for 90 days, until July 9, to allow for negotiations with various countries. Trump subsequently extended the negotiation period to August 1. During this period, each country will apply a basic tariff rate of 10%.

In previous negotiations, the Trump administration reached agreements with Vietnam, Indonesia, the Philippines, Japan, the EU, and South Korea, starting with the UK, which reached an agreement in May.

Among the countries and regions with the largest US trade deficits, the ones that have yet to reach an agreement are mainland China, India, Taiwan, Canada, and Mexico.

According to the presidential order, mainland China is excluded from the new tariffs. This is because during the ministerial consultations held in Sweden on July 29th, China and the US agreed to suspend the reciprocal tariff increase for another 90 days.

Taiwan’s reciprocal tariff rate was 32% in April, but it has been reduced to 20%. Canada and Mexico are not subject to the reciprocal tariffs, but have imposed separate tariffs to combat the synthetic drug fentanyl. Trump also signed an executive order targeting Canada, raising the additional tariff on fentanyl from 25% to 35%.

Reuters reported that senior White House officials said they expect to reach agreements with new countries in the future.

Regarding India, the view was expressed that reaching an agreement at this time is difficult.