Businesses hoping for clarity on where Trump tariffs land will likely have to wait a bit longer.
The administration on Monday pushed back some of its most punishing duties by another three weeks to August, following a 90-day delay. Legal challenges to Trump’s ability to implement tariffs unilaterally are further extending the cloudy outlook for tariff policy and could result in a reversal of some of the duties already in place.
Here’s what to know:
What’s happening with so-called reciprocal
Businesses hoping for clarity on where Trump tariffs land will likely have to wait a bit longer.
The administration on Monday pushed back some of its most punishing duties by another three weeks to August, following a 90-day delay. Legal challenges to Trump’s ability to implement tariffs unilaterally are further extending the cloudy outlook for tariff policy and could result in a reversal of some of the duties already in place.
Here’s what to know:
What’s happening with so-called reciprocal tariffs?
Dozens of countries face so-called reciprocal tariffs if they don’t strike trade deals with the U.S. by August 1. The tariffs were set to take effect on July 9 following a 90-day pause, but Trump on July 7 announced a three-week extension in order to negotiate trade deals.
The reciprocal duties, which initially proposed tariffs as high as 125% on China and applied to more than 80 nations, were first announced April 2. They were in place for just a few hours on April 9 before they got pushed off for several months. If they take effect again, the targeted countries would pay the steeper rate in lieu of the 10% global baseline tariffs Trump has already imposed across nearly all U.S. imports. (The reciprocal duties in many instances don’t match the duties imposed on U.S. exports.)
Trump said his original 90-day reprieve was spurred by more than 75 countries showing a willingness to open negotiations regarding trade, trade barriers, tariffs, currency manipulation and other matters.
Which countries has Trump singled out in regard to reciprocal tariffs?
On July 7, the administration sent letters to more than a dozen countries threatening to raise tariff rates unless each secured trade deals with the U.S. by Aug 1. The White House didn’t specify how the countries were chosen.
Rates set in the letters have, so far, ranged from 25% to 40% and are generally in line with the original reciprocal rates set out in April. Both Japan and South Korea, which together export millions of cars to the U.S., face 25% tariffs, according to the letters.
Trump on July 7 also threatened an additional 10% levy on countries siding with Brics, or a group of countries including Brazil, Russia, India and China.
Where do tariffs stand with China, Mexico, Canada, the European Union and the U.K.?
China: The Trump administration has for now settled on a tariff of 55% on Chinese imports, a level that reflects rates that existed before Trump came to office in January.
In April, the president slapped a rate of up to 145% on China before he dialed it down to 30% in May for 90 days. He stuck with that rate after the nations reached a tentative trade deal in June. That rate is added to 25% tariffs that were in place before he took office.
Mexico and Canada: Trump ordered 25% duties on the import of goods from Mexico and Canada to take effect in March, before exempting products that fall under the U.S.-Mexico-Canada Agreement. The 2020 trade agreement generally allows products to enter duty-free if businesses can show they comply with certain rules regarding the origins of those products’ components.
The 25% tariffs on Mexico and Canada took effect in March with the exception of energy products like crude oil and natural gas, which face a 10% tariff.
The EU: European Union nations face a 10% baseline tariff and a possible ramp-up to 50% if an agreement isn’t reached by August 1. The Wall Street Journal reported in early July that EU officials said they are nearing the outline of a potential deal.
The U.K.: The U.S. has a fairly balanced trading relationship with the U.K. and the two nations reached a tentative trade deal that keeps tariffs at 10% for now. The deal also temporarily shields the U.K. from the 50% steel and aluminum tariffs.
What about tariffs related to specific goods?
Tariffs of 25% on imported vehicles took effect April 3 and on auto parts May 3. Auto goods covered under the U.S.-Mexico-Canada Agreement are exempt.
Steel and aluminum imports to the U.S. have faced 50% tariffs since June 4, up from an earlier 25% rate. The U.K. is exempt from these tariffs.
Trump has considered more sector-specific tariffs, including on pharmaceuticals, semiconductors, automobiles, critical minerals and copper. His administration in April opened investigations into computer chips and pharmaceuticals under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs on goods deemed essential for national security.
How are lawsuits affecting tariffs?
Trump’s tariffs have been challenged in several U.S. courts, raising the odds that some of his duties will be reversed and refunded in the coming months.
The U.S. Court of International Trade in May struck down Trump’s 10% April 2 tariffs as well as higher, so-called reciprocal tariffs, ruling that the president didn’t have the authority to impose them under the International Emergency Economic Powers Act of 1977. A federal appeals court then allowed the tariffs to remain in place pending appeal. Arguments are set for July 31.
The ruling doesn’t affect tariffs applied to sectors like autos, steel and aluminum.
Separately, Sen. Chuck Grassley (R., Iowa) and Sen. Maria Cantwell (D., Wash.) have floated a bill stating that any tariffs imposed by the president would expire after 60 days unless Congress voted to approve them.
This explanatory article may be updated periodically.
Write to Chao Deng at chao.deng@wsj.com
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