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On April 2, 2025, President Trump issued an executive order imposing sweeping reciprocal tariffs pursuant to the International Emergency Economic Powers Act, 50 U.S.C. 1701, et seq. (“IEEPA”), after previously imposing tariffs on certain items of Mexican and Canadian origin, effective April 2, under IEEPA.[1] On April 9, 2025, President Trump announced a 90-day pause on the imposition of reciprocal tariff rates above 10% for most countries to allow for trade deal negotiations. On July 7, 2025, President Trump signed an Executive Order extending the pause on the imposition of reciprocal tariff rates above 10% for most countries to August 1, 2025, if trade negotiations are not completed by that date.
In conjunction with and following the announcement of the August 1 deadline for trade negotiations, President Trump has sent letters to U.S. trading partners announcing new reciprocal tariff rates to be imposed on August 1. On July 7, President Trump sent letters announcing new reciprocal tariff rates for fourteen countries: Bangladesh, Bosnia and Herzegovina, Cambodia, Indonesia, Japan, Kazakhstan, Laos, Malaysia, Myanmar, Serbia, South Africa, South Korea, Thailand, and Tunisia. The new rates in some cases vary from those initially announced on April 2: for example, the newly announced reciprocal tariff rate on Japanese-origin products will be 25% on August 1 (up from 24% as announced on April 2), while the reciprocal tariff rate on Cambodian-origin products has been reduced to 36% (from 49%). Subsequent letters have since been released, including announced rates of 30% on products from the European Union (up from 20% on April 2) and 50% on products from Brazil (up from 10%).
Additionally, on July 10, 2025, and July 11, 2025, President Trump sent letters to Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum, respectively, announcing increased fentanyl-related tariff rates. Effective August 1, Canadian-origin products will be subject to a 35% tariff, and Mexican-origin products will be subject to a 30% tariff, up from the 25% tariff currently in effect for goods of both countries not qualifying for preferential treatment under the United States-Mexico-Canada Agreement.
As with prior tariff announcements, President Trump has warned that any retaliatory tariffs from the targeted countries will be met with further increases to U.S. tariff rates on products from those countries. Unless exempted or otherwise specified, the reciprocal tariffs and fentanyl-related tariffs will apply in addition to general rates of duty and other existing tariffs, such as tariffs imposed under Section 301 of the Trade Act of 1974 or Section 232 of the Trade Expansion Act of 1962. Details of how the reciprocal tariffs, and the fentanyl-related tariffs on products from Canada and Mexico, will operate remain to be announced, including whether products subject to Section 232 tariffs (such as steel and aluminum, and derivatives thereof) will not be subject to reciprocal tariffs, as previously announced on April 2.
At the time of this writing, three countries have announced trade deals with the United States: the United Kingdom, Vietnam, and Indonesia. The U.S.-U.K. trade deal caps U.S. tariffs on most U.K.-origin products at 10%, while the U.S.-Vietnam trade deal places a 20% tariff on Vietnamese-origin products (down from 46% as announced on April 2) and a 40% tariff on products transshipped through Vietnam. Details of the U.S.-Indonesia trade deal have not yet been formally announced, but a tariff of 19% on Indonesian-origin products is expected (down from 32% as announced on April 2). Negotiations with China are currently ongoing, and the July 7 Executive Order states that President Trump’s May 12, 2025 Executive Order lowering tariffs on China is unaffected by the July 7 Executive Order.
Cleary’s international trade team is continuing to track developments on the Trump administration’s tariff policy, and is available to provide guidance on navigating the impact of the Trump administration’s tariffs.
[1] On May 28, 2025, the U.S. Court of International Trade (“CIT”) issued a decision holding that President Trump exceeded his authority under IEEPA in imposing all of these tariffs; on May 29, 2025, the U.S. Court of Appeals for the Federal Circuit temporarily stayed the CIT’s order, keeping the relevant tariffs in effect while the Federal Circuit considers the case. We previously discussed the CIT’s decision in a blog post in May.