U.S. President Donald Trump has introduced a major overhaul to the country’s tariff policy, slapping a 10% baseline tariff on goods from all nations and higher reciprocal rates for countries deemed to have unfair trade practices.
The new tariff regime targets countries with policies that hinder U.S. exports, such as currency manipulation and lax environmental laws. Major trade partners like the European Union will face a 20% tariff, while Vietnam, Japan, South Korea, India, Taiwan, and Thailand will face even higher rates.
China, which holds a significant trade surplus with the U.S., faces a 34% tariff, a rate that could increase to 54% when combined with previous duties. Despite this, countries like Britain, Brazil, and Singapore, which have trade deficits with the U.S., will face the 10% baseline rate.
In a surprising move, Russia, which also has a trade surplus, was excluded from the tariff list. Meanwhile, goods from Canada and Mexico are exempt from the new tariffs due to existing duties related to the U.S.-Mexico-Canada Agreement (USMCA).
Some goods, like metals and automobiles, will remain exempt from these new tariffs under national security provisions. This includes industries under ongoing investigations, such as copper and semiconductors.
The 10% baseline tariff will take effect on April 5, 2025, with higher reciprocal tariffs following on April 9. Trump’s administration is using the 1977 International Emergency Economic Powers Act to justify the tariffs, citing a record $1.2 trillion trade deficit in 2024.
Additionally, Trump has ended the duty-free exemption for small packages from China and Hong Kong, closing a loophole exploited by e-commerce giants.
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