Trump drops deluge of import taxes as his 90-day deal spree falls flat

(Originally published Aug. 1 in “What in the World“) When it rains, it pours.

With much of the U.S. eastern seaboard facing flash floods that have prompted New Jersey and New York to declare states of emergency, Trump is making good on his own threat to rain down tariffs on U.S. consumers and businesses.

The U.S. president signed an executive order Thursday that enacts his threat to impose “reciprocal” tariffs. The new tariffs will take effect Aug. 7, slightly later than his original Aug. 1 deadline, in order to give U.S. customs authorities time to adjust. The new tariffs raise his baseline tax on imports from countries with which the U.S. runs a trade deficit by 50%, to 15% from 10%, with tariffs on imports from some nations as high as 41%. The new order follows Trump’s moves earlier in the week to boost tariffs individually on U.S. imports from Brazil, Canada, and South Korea, while threatening to raise them even further on imports from India:

• Trump on Thursday raised his punitive tax on imports from Canada to 35% from 25%, though the tariff only affects the 15% of U.S. imports from Canada that don’t comply with the U.S.-Mexico-Canada trade agreement remain exempt. Trump also granted an extension to the deadline for Mexico to reach a trade agreement.
• Trump announced on Wednesday a last-minute agreement that raises taxes on goods imported from South Korea to 15%, from their current 10%, but is lower than the 25% Trump had threatened to impose Aug. 1 if no deal was reached.
• Trump also imposed a new, 50% tariff on imports from Brazil—also up from 10%. Trump justified the higher tax as retaliation for Brazil’s prosecution of former President Jair Bolsonaro for an alleged coup attempt in 2022 after losing his reelection campaign. The new tariffs apparently exempt key imports such as Embraer airplanes, oil and gas, or orange juice, however.
• Trump threatened to impose an additional tariff on top of the 25% tariff he has already said he would impose on imports from India as of Aug. 1 to punish India for buying Russian oil.

The new rates follow an agreement Sunday between Trump and the European Union that raises tariffs on imports from the group to 15% from their current 10%. Canada accounts for roughly 13% of U.S. imports. Brazil, India, and South Korea account for roughly 8.4% of total U.S. imports. Goods from nations that run trade deficits with the U.S., like the United Kingdom, will continue to be taxed at 10%.

Confusion and uncertainty about what tariffs Trump would impose on which imports prompted a rush to stock up on inventories before they took effect. That helped buffer U.S. economic growth, which clocked in at roughly 2% year-on-year for the first half of 2025.

But higher tariffs area already starting to hit corporate profits and lift prices. The personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, rose 0.4% in June from May, the fastest increase since January, according to government data released Thursday. The International Chamber of Commerce warned Thursday that the full impact would hit once companies run through the roughly four months of inventories they’ve stockpiled.