Trump Announces Higher US Tariff Rates Starting August 1

The US government is set to send out letters to countries detailing higher US tariff rates starting on 1 August, according to President Donald Trump. Trump mentioned that between 10 to 12 letters will be sent out on Friday, with more to follow in the coming days. The import duties will vary from 60% or 70% tariffs to 10 to 20% tariffs, exceeding his previous estimates. Negotiations over import tax rates are to be concluded by 9 July as countries rush to secure deals.

Trump had previously indicated a baseline tariff of 10% on many economies, up to a maximum of 50%. He did not specify which countries' goods would be affected by the US taxes or if the rates would be limited to certain goods. Trump expressed his preference for directly informing countries about the tariffs they will be subject to, stating it simplifies the process. The issuance of letters is expected to commence soon.

Tariffs are taxes levied on imported goods, paid by the importer. While some firms may absorb the increased costs, they are likely to pass them on to US consumers. The aim is to increase revenue for the US government and make foreign goods more expensive, thereby promoting demand for US-manufactured products.

Trump's announcement precedes a looming deadline next week that could lead to higher duties on goods from various countries. These countries include the European Union, which faced threats of 20% tariffs later raised to 50%, and Japan, which may encounter 35% tariffs on its products. While the UK and US have made progress on a trade deal covering UK cars, US beef, and bioethanol, steel remains unresolved.

According to the source: BBC.