U.S. Imposes 10%-39% Tariffs on Non-Reciprocal Trading Partners

The White House announced on Thursday that the United States President would maintain the global minimum reciprocal tariff rate at 10%, while countries with a trade surplus with the U.S. would face at least a 15% tariff. The announcement came just hours before the midnight deadline, following a second pause in the imposition of country-specific tariffs to allow for negotiations. The specific effective date of the new tariffs remains unclear.

The administration has categorized countries into three groups based on their trade relationships with the U.S. Countries with a trade deficit with the U.S. will face a 10% tariff, while those with a small trade surplus or that have reached agreements with the U.S. will face approximately a 15% tariff. Countries with a large trade surplus and no agreement in place will face higher tariffs. Additional details, including specifics on tariffs for transshipped goods, are yet to be disclosed.

In addition to the baseline tariff rates, the administration has announced specific tariff rates for several countries that have not yet finalized trade agreements. These include a 25% tariff on goods from India, 39% on goods from Switzerland, and 30% on goods from South Africa. Thailand and Cambodia, which reportedly reached agreements at the last minute, will face a 19% tariff. The administration has also increased the tariff on goods from Canada, one of the U.S.'s largest trading partners, from 25% to 35%, with exceptions for goods covered under the United States-Mexico-Canada Agreement (USMCA).

The administration's stated goal is to incentivize domestic manufacturing and protect U.S. industries through the imposition of tariffs on non-reciprocal trading partners. The lower tariff rates will apply to many countries, primarily small and medium-sized economies, with which the administration has little interest in negotiating. The administration has indicated its willingness to engage in further negotiations to address concerns and find mutually beneficial solutions.