Seven more U.S. trading partners were notified July 9 of the higher “reciprocal” tariffs the U.S. plans to impose on them beginning Aug. 1.
Reciprocal tariffs under the International Emergency Economic Powers Act, set at 10 percent for many countries but at 11 to 50 percent for others, were initially announced in an April 2 executive order. The higher tariffs were subsequently suspended for a 90-day period that had been set to expire at 12:01 a.m. on July 9, while the 10 percent rate has remained in place for imports from virtually all countries (Canada and Mexico being notable exceptions).
In a July 7 EO, the president extended the suspension of the higher tariff rates through 12:01 a.m. EDT on Aug. 1. This action does not affect either the global baseline 10 percent tariff or the reciprocal tariff on imports from China, which is set to remain at ten percent through mid-August.
The president has also started sending letters to foreign leaders advising them of the specific reciprocal tariff rates he plans to impose on imports from their countries starting Aug. 1 unless they make further progress in trade talks with the U.S. A second round of letters (see here for information on the first round) prescribes the following tariffs (rates initially announced in April are in parentheses).
- Philippines: 20 percent (up from 17 percent)
- Moldova: 25 percent (down from 31 percent)
- Iraq: 30 percent (down from 39 percent)
- Sri Lanka: 30 percent (down from 44 percent)
- Brunei: 25 percent (up from 24 percent)
- Algeria: 30 percent (unchanged)
- Libya: 30 percent (down from 31 percent)
In addition, Brazil was informed that it would face a 50 percent tariff, despite the fact that the U.S. has a trade surplus with that country, due to Trump’s objection to Brazil’s prosecution of its former president on charges of undermining national elections.
These letters, like those sent earlier in the week, said the above tariff rates could be adjusted up or down in the future depending on the U.S.’ “relationship” with recipient countries, particularly their willingness to further open their markets to the U.S. They letters also warned that (1) “goods transshipped to evade a higher tariff” would be subject to that higher rate and (2) the U.S. will further increase tariffs on imports from recipient countries by the same amount of any tariff increase they impose on U.S. goods “for any reason.”
Click here to stay up to date on the U.S.’ reciprocal tariffs.
ST&R offers a three-pronged approach to avoiding, mitigating, and/or recovering import tariffs. For more information on which of these strategies might be most effective for your business, please contact ST&R.
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