by Washington (AP) The next stage in President Donald Trump’s trade policy, which will put the strength of American relationships forged over decades and the global economy to the test, is an executive order he issued on Thursday that imposes new tariffs on a broad range of U.S. trading partners, effective August 7.
On Thursday night, just after 7 p.m., the order was issued. Prior to the president’s self-imposed deadline on Friday, the White House announced deals with a number of countries and blocs, resulting in a frenzy of tariff-related activity during the past several days. According to a senior administration official who talked to reporters on the condition of anonymity during a call, the tariffs will be applied later so that the rates schedule may be harmonized.
The directive concluded a busy Thursday in which countries attempted to resume talks with Trump. With a base rate of 10% to be applied to nations not on the list, it established rates for 68 nations as well as the 27-member European Union. According to the senior administration official, regional economic characteristics and the trade imbalance with the United States were the basis for the rates.
Trump discussed trade on the phone with Mexican President Claudia Sheinbaum on Thursday morning. Following the discussion, the U.S. president announced that he would begin a 90-day period of negotiations with Mexico, one of the country’s biggest trading partners, with the current 25% tariff rates remaining in place, rather than the 30% he had previously threatened.
After a call with Trump that he described as “very successful in terms of the leaders getting to know each other better,” Mexican leader Claudia Sheinbaum wrote on X, “We avoided the tariff increase announced for tomorrow and we got 90 days to build a long-term agreement through dialogue.”
Trump’s intention to impose import levies that most economists believe will eventually be partially paid by American firms and consumers has been the one constant during his months-long rollout of tariffs, but the uncertainty generated a sense of drama.
Trump told reporters Thursday afternoon, “We have made a few deals today that are excellent deals for the country,” without going into specifics about the agreements or countries involved. During the call with reporters, the senior administration official refused to identify the countries that have new agreements.
Although we haven’t spoken to Canada today, Trump claimed that Prime Minister Mark Carney of Canada had called in advance of 35% tariffs being placed on a number of his country’s commodities.
After his earlier Liberation Day tariffs in April caused a stock market panic, Trump set the deadline for Friday. Trump imposed a 90-day negotiation time after his unusually high tariff rates, which were announced in April, sparked fears of a recession. His inability to negotiate enough trade agreements with other nations led him to extend the deadline and send letters to foreign leaders that merely mentioned prices, which resulted in a number of hurried agreements.
In addition to earlier agreements with the European Union, Japan, Indonesia, and the Philippines, Trump struck a deal with South Korea on Wednesday. On Fox News Channel’s Hannity, his commerce secretary Howard Lutnick stated that deals had been reached with Thailand and Cambodia following their agreement to a ceasefire in their border dispute.
Wealthy Norway and Switzerland were still unsure of their tariff rates as of Thursday. A key document detailing the mechanism for taxing imported cars and other commodities from the 27-member state bloc was still pending completion by EU officials. Trump was in Scotland on Sunday when he announced an agreement.
Trump has allegedly connected fentanyl trafficking to the 25% tax he indicated will remain on goods coming into the United States as part of the deal with Mexico. He stated that during the negotiating period, steel, copper, and aluminum would be subject to a 50% levy, while automobiles would be subject to a 25% tariff.
He stated that Mexico would remove its non-tariff trade barriers, but he gave no details.
The 2020 U.S.-Mexico-Canada Agreement, or USMCA, which Trump negotiated during his first term, still protects some commodities from tariffs.
That agreement is up for renegotiation next year, but Trump seems to have soured on it. Imposing tariffs on imports from Canada and Mexico earlier this year was one of his first major actions as president.
According to data from the U.S. Census Bureau, last year’s trade imbalance between the United States and Mexico was $171.5 billion. In other words, the United States purchased more items from Mexico than it exported.
While it was only $63.3 billion in 2016, the year before Trump began his first term in office, the gap with Mexico has increased since the USMCA.
