WASHINGTON (TNND) — Dozens of countries around the world were slapped with new tariffs that take effect next week after they were unable to cut trade deals with the United States as President Donald Trump continues his push to remake the global economy through steep taxes on imports that have stirred recession fears and handed businesses heaps of uncertainty.
Tariffs on more than 60 countries will go into effect at 12:01 a.m. on Aug. 7 after the president’s self-imposed deadline to reach trade deals passed on Friday. Tariff rates start at 10% and climb as high as 50% for some countries that Trump says has unfair trade barriers or run too high of a trade deficit with the U.S.
Some of America’s biggest trading partners were able to secure agreements during the 90-day negotiating period, including the European Union, Japan and the United Kingdom. But most of those deals leave some major trade issues unsettled and still resulted in significantly higher tariff rates compared to before Trump took office.
Tariffs averaged around 2.5% in January and have already escalated them to more than 18%, according to Yale University’s Budget Lab.
Major industrialized economies like the EU and South Korea are facing 15% tariffs, while countries that the U.S. has a trade surplus with are being hit with 10% rates. Bangladesh, Sri Lanka, Taiwan and Vietnam are at 20%, India’s tariffs are 25% and Brazil’s final rate is 50%.
China and Mexico have received an extension from Trump’s new tariff list to keep negotiations moving but are also likely to see higher tariffs if a deal is ultimately reached. Canada was hit with an increase to 35% on goods that do not comply with the U.S.-Mexico-Canada Agreement, though most Canadian goods sent to the U.S. qualify for the exemption.
Administration officials have said they are still open to trade negotiations even as Trump’s so-called reciprocal tariffs go into effect. While that could create an avenue for countries to have their rates lowered, it also adds a new element of uncertainty for consumers and businesses trying to navigate what has been a chaotic and frequently shifting trade environment.
“It doesn’t mean that somebody doesn’t come along in four weeks and say we can make some kind of a deal,” Trump told NBC News on Thursday.
Most of the countries in Trump’s latest executive order had their tariff rates fall, even if they did not reach a deal with the White House, compared to the rates that were originally threatened during his April 2 “Liberation Day” announcement. But tariff rates are still significantly higher than they were before Trump took office, raising questions about who will end up absorbing the price increases for goods that enter the U.S. — American consumers, the companies importing them or foreign businesses.
Trump has claimed his tariffs and trade deals will bring a manufacturing boom to the United States as companies are compelled to reshore production away from cheaper markets overseas and be a boon to American prosperity. But economists are concerned the tariffs will increase costs for consumers and damage the economy.
Evidence of a slowing economy is starting to emerge in government data. Friday’s job report showed the labor market drastically slowing with just 39,000 jobs added last month and steep downward revisions to May and June, cutting 258,000 jobs off the initial estimate. Manufacturing shed 11,000 jobs last month after dropping 15,000 in June and 11,000 in May.
There are also concerns about the impact Trump’s expansive tariffs will have on inflation as major retailers like Walmart and Procter & Gamble have already said they will force them to increase prices. One measure of inflation, the personal consumption expenditures index, released on Thursday that prices increased 2.6% over the last 12 months through June.
American consumers, already wary of spending after the post-COVID inflation that still has not returned to 2%, are pulling back on spending and could continue to do so as tariffs bite harder.
“The possibility of stagflation is real,” said Ryan Young, senior economist at the American Enterprise Institute. “Inflation is not going back to COVID levels because the Fed’s not juicing the money supply, but we are going to see a bunch of one-time hikes as tariffs phase in, and of course, that will slow down manufacturing, it will put a dent in retail and everything else.”
Another layer of uncertainty surrounding Trump’s tariffs is whether they will survive legal challenges that question whether the president had the authority to implement them. During arguments on Thursday, a panel of appeals court judges appeared skeptical that America’s trade deficit justifies a national emergency for Trump to utilize a 1977 law to impose tariffs without sign-off from Congress.
Attorneys for the administration acknowledged during the hearing that no president had interpreted the statute used to justify most of Trump’s new tariff regime but argued it was still legal. The case is widely expected to be appealed to the Supreme Court regardless of the decision.
If Trump’s tariffs under the 1977 statute, the International Emergency Economic Powers Act, were to be struck down, he would still have other ways to impose tariffs. But other avenues for tariffs come with other policymaking requirements like monthslong studies, mandatory reviews and limits to the rate at which they can be applied.
“There’s still a lot of uncertainty because of that court case,” Young said. “The president only turns to the IEEPA statute because it’s quick, he can do things instantly. If you take that away, he’s not going to stop making tariffs, but he’ll have to move at a slower pace and he’ll have more checks on his authority.”