President Donald Trump’s higher tariff rates of 10 percent to 50 percent on dozens of trading partners kicked in on Thursday, testing his strategy for shrinking US trade deficits without massive disruptions to global supply chains, higher inflation and stiff retaliation from trading partners.
US Customs and Border Protection agency began collecting the higher tariffs at 12:01 a.m. EDT (0401 GMT) after weeks of suspense over Trump’s final tariff rates and frantic negotiations with major trading partners that sought to lower them.
Goods loaded onto US-bound vessels and in transit before the midnight deadline can enter at lower prior tariff rates before October 5, according to a CBP notice to shippers issued this week. Imports from many countries had previously been subject to a baseline 10 percent import duty after Trump paused higher rates announced in early April.
But since then, Trump has frequently modified his tariff plan, slapping some countries with much higher rates, including 50 percent for goods from Brazil, 39 percent from Switzerland, 35 percent from Canada and 25 percent from India. He announced on Wednesday a separate, 25 percent tariff on Indian goods to be imposed in 21 days over the South Asian country’s purchases of Russian oil.
“RECIPROCAL TARIFFS TAKE EFFECT AT MIDNIGHT TONIGHT!,” Trump said on Truth Social just ahead of the deadline. “BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA. THE ONLY THING THAT CAN STOP AMERICA’S GREATNESS WOULD BE A RADICAL LEFT COURT THAT WANTS TO SEE OUR COUNTRY FAIL!”
Eight major trading partners accounting for about 40 percent of US trade flows have reached framework deals for trade and investment concessions to Trump, including the European Union, Japan and South Korea, reducing their base tariff rates to 15 percent.
Britain won a 10 percent rate, while Vietnam, Indonesia, Pakistan and the Philippines secured rate reductions to 19 percent or 20 percent.
“For those countries, it’s less-bad news,” said William Reinsch, a senior fellow and trade expert at the Center for Strategic and International Studies in Washington.
“There’ll be some supply chain rearrangement. There’ll be a new equilibrium. Prices here will go up, but it’ll take a while for that to show up in a major way,” Reinsch said.
Countries with punishingly high duties, such as India and Canada, “will continue to scramble around trying to fix this,” he added.
Trump’s order has specified that any goods determined to have been transshipped from a third country to evade higher UStariffs will be subject to an additional 40 percent import duty, but his administration has released few details on how these goods would be identified or the provision enforced.
Trump’s July 31 tariff order imposed duties above 10 percent on 67 trading partners, while the rate was kept at 10 percent for those not listed. These import taxes are one part of a multilayered tariff strategy that includes national security-based sectoral tariffs on semiconductors, pharmaceuticals, autos, steel, aluminum, copper, lumber and other goods. Trump said on Wednesday the microchip duties could reach 100 percent.
China is on a separate tariff track and will face a potential tariff increase on August 12 unless Trump approves an extension of a prior truce after talks last week in Sweden. He has said he may impose additional tariffs over China’s purchases of Russian oil as he seeks to pressure Moscow into ending its war in Ukraine.
REVENUES, PRICE HIKES
Trump has touted the vast increase in federal revenues from his import tax collections, which are ultimately paid by companies importing the goods and consumers of end products.
The higher rates will add to the total, which reached a record $27 billion in June. US Treasury Secretary Scott Bessent has said that US tariff revenues could top $300 billion a year.
The move will drive average US tariff rates to around 20 percent, the highest in a century and up from 2.5 percent when Trump took office in January, the Atlantic Institute estimates.
