After months of negotiations and temporary extensions, President Donald Trump’s global tariff policy is set to take effect Aug. 1. The administration has finalized agreements with several countries, including Japan and the United Kingdom, and the European Union, setting tariff rates between 10% and 15%.
Here are five things to know:
- President Trump announced July 27 that the U.S. and E.U. — the nation’s largest trading partner — reached an agreement to set tariffs at 15%, a reduction from the 30% threatened July 12 and the 20% he said would be imposed April 2, NBC News reported July 27.
European Commission President Ursula von der Leyen said the deal would “bring stability. It will bring predictability. That’s very important for our businesses on both sides of the Atlantic.” - Despite the new trade agreement, uncertainty remains for pharmaceutical products. President Trump has indicated that higher tariffs on pharmaceuticals, particularly from Ireland, could still be imposed, with threats as high as 200%. The current deal does not clarify whether the tariffs on these goods will be applied or postponed.
However, as part of the agreement, the E.U. and the U.S. agreed to apply zero tariffs on certain imports, including generic pharmaceuticals and semiconductors. - In addition, the U.S. reached a trade deal with Japan in July, setting a 15% tariff on goods, lower than the 25% initially threatened, The Hill reported July 27. In making the agreement, President Trump also said Japan would invest $550 billion in projects in the U.S. The Philippines also agreed to a trade deal, lowering the levy amount from 20% to 19%.
- President Trump also announced an agreement reached with the U.K. in early May, the first major tariff deal struck. The deal set the tariff amount at 10%, down from 25% initially threatened. The U.S. and China also announced the outline of a trade deal in late May, with the U.S. reducing the tariff rate from 145% to 30% and China reducing its rate from 125% to 10%.
- This comes after the White House sent dozens of letters in July informing countries of what they expect their tariff rate to be before the Aug. 1 deadline.
