On 31 July 2025, the American president brought a degree of clarity to the tariff landscape by issuing the executive order on “reciprocal tariffs,” which comes into force on 7 August 2025. This measure replaces the spring announcements with the outcomes of negotiations. The order outlines the new tariff structure, with the exception of China, for which the executive order dated 12 May 2025 remains valid. Canada and Mexico are also excluded, as they benefit from tariff exemptions under the USMCA agreement and have a 90-day window to negotiate duties on other products.
Unlike the earlier April announcement, the new framework does not introduce a bilateral mechanism that rewards or penalises partners based on how they tax American products. Instead, it adopts a list-based approach. Additional tariffs are now assigned on a country-by-country basis via new entries in the Harmonized Tariff Schedule, which partially replaces the previous structure. Countries not explicitly listed in the new annex remain subject to the generalised 10 percent tariff announced in April. Annex I of the executive order allocates widely varying rates: from 10 percent increases for certain countries to peaks above 30 percent for others. There is no regional uniformity—Africa, for instance, is not treated as a single block, with rates varying significantly among individual states.
The European Union has a dedicated section, not governed by a fixed additional percentage but by an “adjustment” rule up to the 15 percent threshold, tied to the most-favored nation (MFN) rates in the “Column 1 – General” of the HTSUS. In practice, if a European good currently has an MFN duty below 15 percent, the United States will apply a top-up to bring the total to 15 percent; if the MFN is already at or above 15 percent, no additional duty is imposed. The order also specifies how to handle specific or compound duties: in such cases, the MFN’s ad valorem equivalent must be calculated to apply the adjustment correctly. Practically, this means many European goods with low MFN rates—from industrial components to various electronics and chemicals—will see their tariff lifted to 15 percent, while items already above the threshold will remain unaffected.
Another key element is the clause concerning bilateral agreements: for countries that have signed, or are close to signing, accords with Washington, the rates set out in Annex I will remain in force until subsequent orders formally incorporate the new terms. This grants the executive branch wide flexibility to tailor the regime based on ongoing negotiations.
The implementation timeline is tight but allows a logistical grace period. The new measures become effective seven days after signing, meaning 7 August 2025. However, goods loaded abroad before that date and cleared in the United States by 5 October 2025 may still benefit from the previous regime. After that deadline, the new system becomes fully operational.
To preserve the integrity of the new framework, the order tightens controls on circumvention tactics, particularly transhipment schemes aimed at avoiding tariffs by rerouting through third countries. When authorities confirm that such circumvention has occurred, an additional 40 percent duty is imposed on top of the regular rate, which cannot be mitigated or waived by Customs and Border Protection. To support this provision, the government will publish a semi-annual list of facilities and jurisdictions involved in evasive schemes, with the possibility of swiftly updating punitive measures.
The implementation and ongoing management of the new framework is assigned to an inter-agency coordination group involving the Department of Commerce, the Department of Homeland Security (with CBP), and the Office of the United States Trade Representative. These bodies may issue operational rules, propose amendments to the HTSUS through the Federal Register, and recommend adjustments based on observed effects, including the tightening or easing of measures in response to retaliation or unexpected economic outcomes.
For importers, the impact will be immediately visible on customs declarations. Each shipment must now indicate, in addition to the regular tariff code, the corresponding 9903.02.xx code linked to the country of origin. Those importing from the European Union will need to carefully verify the HTSUS classification and MFN rate for each product in order to apply the “top-up” mechanism to reach 15 percent, including, where necessary, the ad valorem equivalent for specific or compound tariffs. At the same time, rigorous documentation of origin becomes critical, as penalties for transhipment are severe and leave no room for administrative leniency.
Only three countries have tariffs below 15 percent, all set at 10 percent: Brazil, the Falkland Islands, and the United Kingdom. The group subject to 15 percent includes 40 countries (counting the European Union as a single entity), many of them African. 26 countries face higher rates, most of them in Asia. Rates range from a low of 18 percent for Nicaragua to a high of 41 percent for Syria. Among these are Switzerland, penalised with a 39 percent rate for unclear reasons, and Serbia at 35 percent.
This is the full scope of the new regulation, introduced four months after the “Liberation Day” when Trump announced his tariff revolution. In that time, the global economy has not suffered major shocks, mainly because it adapted to Trump’s erratic decisions by speeding up or slowing down exports. However, this has placed strain on logistics chains. The current executive order may offer a modicum of stability, but without guarantees, since one thing appears certain: Trump is using tariffs not as an economic regulator but as a tool to influence the domestic and foreign policies of other nations. Therefore, he may change them at any moment to suit his interests.
Nevertheless, a couple of uncertainties remain. The first concerns certain product categories for which Trump has postponed tariff decisions. These include items crucial to the economy and citizens, such as pharmaceuticals, semiconductors, and key minerals and production inputs. The second uncertainty concerns the legality of the tariffs themselves, as US courts are currently assessing whether such sweeping changes can be imposed through an executive order alone, or if congressional approval is required.
The application of these tariffs will reshape the economies of many countries and alter the architecture of global trade. But they will also affect American citizens. Applying the model used by the Federal Reserve during Trump’s first trade war, Bloomberg Economics estimates that the 12.8 percentage point increase in average tariffs since Trump’s return to power could reduce US GDP by 1.8 percent and raise core prices by 1.1 percent over two to three years.
Price increases in the United States will depend on how the tariffs cascade through the supply chain, which includes foreign producers and exporters, and domestic importers and distributors, or industries that rely on foreign components or semi-finished goods. Analysts expect there will be both direct and indirect consequences for American consumers, prompting the Federal Reserve to hold off on cutting interest rates for now. There is also a risk that American producers will face retaliatory tariffs abroad. In short, the game is still on.
List of countries affected by the new tariffs, by rate
10 percent
Brazil, Falkland Islands, United Kingdom
15 percent
Afghanistan, Angola, Bolivia, Botswana, Cameroon, Chad, Costa Rica, Ivory Coast, Ecuador, United Arab Emirates, Fiji, Ghana, Guyana, Iceland, Israel, Japan, Jordan, Lesotho, Liechtenstein, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nauru, Nigeria, North Macedonia, Norway, Papua New Guinea, Democratic Republic of the Congo, South Korea, Trinidad and Tobago, Turkey, Uganda, Vanuatu, Venezuela, Zambia, Zimbabwe, Equatorial Guinea
18 percent
Nicaragua
19 percent
Cambodia, Indonesia, Malaysia, Pakistan, Philippines, Thailand
20 percent
Bangladesh, Sri Lanka, Taiwan, Vietnam
25 percent
Brunei, India, Kazakhstan, Moldova, Tunisia
30 percent
Algeria, Bosnia and Herzegovina, Libya, South Africa
35 percent
Iraq, Serbia
39 percent
Switzerland
40 percent
Laos, Myanmar
41 percent
Syria
