Trump Announces Imminent Implementation of Reciprocal Tariffs, Effective This Week
The July 31, 2025 Executive Order, titled "Further Modifying the Reciprocal Tariff Rates", has established revised reciprocal tariff rates for U.S. trading partners. This order replaces the initial rates set out in the April 2, 2025 Executive Order.
Most countries will default to a 10% global baseline tariff rate, but several countries have specific higher rates. For instance, India faces a 25% reciprocal tariff rate starting August 7, 2025, with an additional 25% penalty tariff set to take effect on September 17, 2025, due to India's purchases of sanctioned Russian oil and armaments. This means that imports from India will be subject to a combined 50% tariff liability after September 17.
The European Union has a unique tariff structure. Goods from the EU with a Column 1 duty rate of less than 15 percent will be subject to a 15% tariff, while goods with a Column 1 duty rate that is already at least 15 percent will not have additional reciprocal tariffs.
Selected country-specific revised tariff rates under the July 31 EO include:
| Country | Revised Reciprocal Tariff Rate | |------------------|-------------------------------| | United Kingdom | 10% | | Vietnam | 20% | | Indonesia | 19% | | Philippines | 17% (later 20%) | | Japan | 15% (later 25%) | | European Union | 15% ("all-inclusive" sliding rate) | | South Korea | 25% | | Cambodia | 36% (later reduced from 49%) | | Thailand | 36% | | Norway | 15% | | Israel | 15% | | Taiwan | 20% |
Goods loaded onto vessels before August 7, 2025, and entered before October 5, 2025, are exempt from these new tariffs and remain subject to the 10% baseline. Goods transshipped to evade tariffs face heavy penalties, including a 40% tariff rate and customs fraud penalties.
It is important to note that China, Canada, and Mexico are not included in the reciprocal tariff rates announced on July 31, 2025, and are subject to additional tariffs under separate executive orders.
The overall U.S. effective tariff rate has increased to an estimated 18.6%, the highest since 1934, due to this EO and related tariffs.
In other news, the United States and Mexico have agreed to extend their negotiations for 90 days, while the United States and China have agreed to a temporary truce in hopes of reaching a deal, with the truce currently set to expire on August 12.
The status of countries that have not struck deals with the Administration continues to be fluid, and WilmerHale is closely monitoring developments with respect to the reciprocal tariff regime. Any country not listed in Annex I will be subject to a 10% baseline reciprocal tariff, except for Canada, Mexico, North Korea, Russia, and Belarus, which are excluded from the 10% baseline tariff.
The July 31, 2025 Executive Order regarding the Reciprocal Tariff Rates has significantly impacted several countries' import costs. For example, India is now subject to a combined 50% tariff liability starting September 17, 2025, due to their purchases of sanctioned Russian oil and armaments, raising concerns in the realm of finance and general news. Conversely, the European Union has a unique tariff structure, with goods having a Column 1 duty rate of less than 15 percent subject to a 15% tariff, while goods with a Column 1 duty rate of 15 percent or more remain tariff-free, a situation that could potentially influence investing in EU businesses and economics.
