The White House released a statement this Thursday, July 31, formalizing the new tariff rates that more than 60 countries and the European Union will face. According to the document, they will take effect seven days after the date of this order. In the case of Mexico and Canada, the agreements that regulate trade in North America, the proximity of the two countries, and negotiations with their neighbors have caused the deadlines to be extended, and for now, no further tariffs have been defined. Brazil has suffered the brunt with a 50% tariff, the highest in the world to date. Washington asserted that this is because the decisions of the Luiz Inácio Lula da Silva administration"constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States." For countries not listed in the new order, it stipulates that “goods from any trading partner not listed in Annex 1 of this order shall be subject to an additional 10% ad valorem tariff.”
Some governments eventually learned the final percentage through letters or announcements on Truth, the Republican president's social media platform. The European Union, for example, agreed to receive a 15% tariff on its exports, but without any reciprocal imposition; India received a 25% tariff on its products, and South Korea obtained 15% tariffs in exchange for a $350 billion investment from the Asian country and zero tariffs on imports from Washington. Days earlier, Trump also signed an executive order imposing a 50% cut on imports of copper products such as pipes, cables, and electrical components.
Negotiations with Mexico and Canada
The three countries are part of the Free Trade Agreement, so negotiations with Mexico and Canada are excluded from the USMCA review. The latest call between President Claudia Sheinbaum and Donald Trump, just hours before the deadline, granted Mexico a 90-day extension to continue negotiations due to the two countries'"complex bilateral relationship." She also announced that "the current 25% tariffs on products not subject to the free trade agreement, the USMCA, remain in effect."
With Canada, on the other hand, the response has been harsher. After Trump announced hours earlier on social media that negotiations would be complex if his neighbor recognized Palestine, he said,"Canada has just announced that it supports the creation of a State of Palestine. That will make it very difficult for us to reach a trade agreement with them." This Thursday, the US president signed an executive order increasing tariffs from 25% to 35%. As with Mexico, this tax does not apply to products covered by the Free Trade Agreement, but according to RBC Economics, it is estimated to represent 94% of Canada's exports. At the same time, there is a separate 10% tax on energy resources and potash, a 50% tariff on steel and aluminum imports, and a 25% tariff on automobiles and auto parts.
Liberation Day
More than 100 countries faced the uncertainty of whether the tariff schedule announced by Donald Trump on April 2 would become a reality. The so-called trade war initiated by the president announced a 10% tariff on dozens of nations, penalties for his main trading partners, and the absence of Mexico and Canada from the list of countries. Colombia, for example, managed to maintain its 10% tariff, as did Argentina, Uruguay, and Guatemala. Haiti, Bolivia, the Bahamas, Ecuador, Costa Rica, Peru, and Chile also retained the initial 10%.
Guyana has one of the highest taxes, with a tariff of 38%. Nicaragua follows with an 18% tariff, and Venezuela is close behind with 15%. Although Honduras and El Salvador initially appeared on the table with 10%.
