Tariff pause extended until August, some countries still in limbo

President Trump has simultaneously ramped up his tariff plan and kicked the can down the road. The President has extended the current tariff pause for most countries until the 1st of August. At the same time, he has now begun sending letters informing countries of the tariffs they will face on August 1st if no deal can be agreed before then.

• It’s unclear how these new tariff rates were decided; however, the new rates are similar to those announced on April 2nd. As a refresher, the original rates were based on a ratio of each country’s trade balance with the US, relative to that country’s imports from the US – essentially punishing countries with large trade deficits. No explanation has been given for tariffs that have been adjusted, including Japan.

• While details of the new tariff scheme remain thin, communications suggest exemptions to the tariffs will remain consistent with the previously announced. This includes the sector-specific tariffs (including on steel and aluminium and autos) and some critical imports for the US (including semiconductors, pharmaceuticals and energy). Assuming the current exemptions remain in effect, each country’s new effective tariffs are listed below.