United States Reaches Trade Agreements With Three Countries, Raises Tariffs On Others, Including Canada

Last week, U.S. officials announced that they had reached tentative trade agreements with three more countries. (As Connecting the Dots reported last week, the U.S. government reached deals with Indonesia, Japan, the Philippines, and the European Union.)

First, on July 29, President Donald Trump announced a trade deal with South Korea. Under the agreement, all products coming into the United States from South Korea will face a 15 percent tariff. U.S. goods imported to South Korea would not be subject to any tariffs. South Korea also is to provide $350 million in investments to the United States and will buy $100 billion in energy products. The White House has not released additional information and, according to Reuters, officials from South Korea said they do not yet have a written agreement with the U.S. government.

The other two deals are reportedly with Thailand and Cambodia. U.S. Commerce Secretary Howard Lutnick said the United States also had reached an agreement with those two nations, but, again, few details are available.

Two days after announcing the deal with South Korea, in an executive order issued on July 31, President Donald Trump said he would life lift his pause on country-specific tariffs while implementing a range of new rates for specific trading partners that will go into effect Aug. 7, 2025. The order, available at this link, outlines rates for more than 60 countries, establishing a 10 percent baseline for all imports, but setting higher levies for many countries, including Syria (41 percent), Laos (40 percent), Switzerland (39 percent), Iraq (35 percent), South Africa (30 percent), and India (25 percent). Goods that were loaded onto vessels or are in transit to U.S. ports by the day the tariffs are implemented will not be subject to the duties as long as they arrive in the United States for consumption by Oct. 5, 2025. If the U.S. Bureau of Customs and Border Protection finds goods were “transshipped to evade applicable duties,” the products will face a 40 percent tariff, as well as additional penalties and fees.

The president signed a separate executive order raising tariffs on imports from Brazil to 50 percent and another order that raised rates on Canadian products to 35 percent.

Under the order affecting Canada, goods qualifying for preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA) will continue to be exempt from the penalties, but goods transshipped to evade the 35 percent tariff will be subject to a transshipment tariff of 40 percent. The new policy with Canada took effect Friday, Aug. 1. In a fact sheet, the White House said Canada had “failed to cooperate in curbing the ongoing flood of fentanyl and other illicit drugs, and it has retaliated against the United States” for President Trump’s actions “to address this unusual and extraordinary threat to the United States.”

At least one country that had not yet announced trade deals with the U.S. government did get extensions. Following a call with Mexico’s president last Thursday, Aug. 31, President Trump announced a new 90-day negotiating period with Mexico during which 25 percent tariff rates will remain in place.