U.S. Trade Deals & Tariff Deadline

The Trump Administration's trade policies continue to center on leveraging tariffs to secure bilateral trade agreements, with a 10% universal tariff on most imports and higher "reciprocal" tariffs set to resume on August 1st unless deals are finalized. Over the last couple of weeks of July, the Administration has completed significant trade deals, notably with the European Union, Japan, and the Philippines, building on earlier agreements with China, the United Kingdom, Vietnam, and Indonesia. These deals aim to reduce trade deficits, boost U.S. manufacturing, and address national security concerns, though they face legal challenges and economic scrutiny.

The Trump Administration has secured or announced framework agreements with several countries, though many details remain unclear or unsigned. These deals often involve reduced tariffs compared to initially higher rates, alongside commitments from trading partners for investments or increased purchases of U.S. goods. 

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Key Trade Deals

• European Union (EU): On July 27, 2025, a deal was announced setting a 15% tariff on most EU goods, down from a proposed 30% (and briefly proposed 50%). The EU committed to $750 billion in U.S. energy purchases and $600 billion in investments, though specifics on tariff reductions for U.S. exports (e.g., aircraft, industrial, and agricultural goods) are still under negotiation.
• Japan: A trade agreement sets a 15% tariff on Japanese goods (down from 25%), with Japan pledging $550 billion in U.S. investments and increased purchases of U.S. rice and cars.
• South Korea: Announced on July 30, 2025, this deal imposes a 15% tariff on South Korean imports, with South Korea agreeing to zero tariffs on U.S. goods (e.g., cars, trucks, agriculture) and a $350 billion investment in the U.S., plus purchases of U.S. liquefied natural gas.
• Philippines: A July 22, 2025, agreement sets a 19% tariff on Philippine exports (down from 20%), with the Philippines eliminating all tariffs on U.S. goods, including automobiles and industrial products.
• Indonesia: A 19% tariff on Indonesian exports (down from 32%) was agreed upon, with increased market access for U.S. goods.
• Vietnam: A 20% tariff on Vietnamese goods (down from 46%) was set, with Vietnam opening markets to U.S. exports.
• United Kingdom: A deal maintains a 10% tariff rate, with the U.K. agreeing to open markets for U.S. beef and other goods.
• China: On August 12, 2025, a framework agreement paused higher tariffs for another 90 days, maintaining 20% “fentanyl” tariffs and 10% “reciprocal” tariffs. Both sides reduced retaliatory tariffs significantly (e.g., U.S. from 145% to 30%, China from 125% to 10% for 90 days). Negotiations continue, with no final deal as of August 13th.  
• Pakistan: Announced on July 30, 2025, with a focus on developing Pakistan’s oil reserves, though the new tariff rate was not specified (previously 29%).

Tariff Rates
Trump’s tariffs, implemented under the International Emergency Economic Powers Act (IEEPA) and Section 232, have raised the average U.S. tariff rate from 2.5% to an estimated 18.2% as of July 2025, after peaking at 27% earlier in the year. Key tariff details include:
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• Global Baseline Tariff: Initially set at 10% on April 2, 2025, for all countries, Trump indicated on July 28th that this may rise to 15–20% for countries without trade deals, effective August 1, 2025.
• Country-Specific Tariffs (effective August 1, 2025, unless noted):
  • Canada: 35% on all imports (excluding USMCA-compliant goods, which remain duty-free). Non-USMCA energy and potash face a 10% tariff. Tariffs were suspended for 30 days but took effect March 4, 2025.
  • Mexico: 30% on non-USMCA goods (effective March 4, 2025, after a 30-day suspension). USMCA-compliant goods remain duty-free.
  • China: 20% “fentanyl” tariff and 10% “reciprocal” tariff, with higher rates (up to 125%) paused for 90 days as of August 12, 2025.
  • India: 25% tariff, with a potential additional penalty for ties with Russia. No deal finalized.
  • Brazil: 50% tariff, up from 10% in April, citing trade imbalances and political issues.
  • Algeria: 30% tariff (unchanged from April).
  • Bangladesh: 35% tariff (down from 37%).
  • Brunei: 25% tariff (up from 24%).
  • Cambodia: 36% tariff (down from 49%).
  • Malaysia, Kazakhstan, Tunisia: 25% tariffs.
  • Myanmar, Laos: 40% tariffs.
• Industry-Specific Tariffs:
  • Steel and Aluminum: 50% under Section 232, effective February 10, 2025.
  • Autos and Auto Parts: 25% under Section 232, effective April 3, 2025, with exemptions for certain USMCA-compliant imports.
  • Copper: A 50% tariff proposed, pending a Commerce Department review due by November 22, 2025.
  • Pharmaceuticals and Semiconductors: Proposed 25% or higher tariffs, not yet implemented.
  • Venezuelan Oil: 25% tariff on Venezuela and countries purchasing its oil, effective April 2, 2025.
• Exclusions: Goods like copper, pharmaceuticals, semiconductors, lumber, critical minerals, energy products, and certain electronics (added April 11, 2025) are exempt from reciprocal tariffs but may face Section 232 tariffs.

Challenges and Outlook

• Many deals lack signed agreements or clear details, raising doubts about their long-term impact.
• Trump invoked IEEPA to impose a 10% baseline tariff and higher rates for countries with trade surpluses, citing a national emergency due to trade deficits. The U.S. Court of International Trade ruled these tariffs illegal in May 2025, but a federal appeals court stayed the ruling, keeping tariffs in place pending review.
• Negotiations with China continue, with an extended November 12th deadline for the tariff pause.
• August 1, 2025, is a key deadline for new tariff rates, with Trump emphasizing no further delays.

Commerce Lexington supports open trade policies with markets abroad and removing barriers that shut U.S. exports out of foreign markets.  The organization also supports efforts to implement fewer federal regulations and less taxation to grow our economy. However, we remain concerned about the potential negative economic impact of tariff policies on key industries in the Greater Lexington Region, Commerce Lexington will continue to monitor these issues, talk with business leaders, and communicate concerns to federal officials.  If your businesses or organization is concerned about tariff impacts, please contact Commerce Lexington to share feedback.