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Tariff ‘Liberation Day’: Countries Without U.S. Deals Brace for Steep Hikes
August 2025 marks a turning point in U.S. trade policy: after months of delays, President Trump’s sweeping “Liberation Day” tariff strategy is now set to go into effect on August 1 (with full implementation in early August)
What is “Liberation Day”
On April 2, 2025, then-President Trump declared the U.S. trade deficit a national emergency under the International Emergency Economic Powers Act (IEEPA), unveiling reciprocal tariffs—a 10% baseline on nearly all imports, with substantially higher rates (up to 50%) imposed on dozens of countries.
Though implementation was delayed, the Aug 1 deadline was emphatically upheld by Commerce Secretary Howard Lutnick: “No extensions, no more grace periods”
How It Works: Deal vs. No Deal
• Countries with agreements: Nations that struck preliminary deals—such as the UK (10%), EU, Japan, South Korea (15%), and Indonesia, Philippines (19%), and Vietnam (20%)—receive reduced tariff rates under framework agreements.
• Countries without deals: Those that failed to complete agreements by the deadline face tariffs ranging from 15% up to 40% or more, depending on trade deficits and geopolitical factors. For example: Syria (41%), Laos, Myanmar (40%), Switzerland (39%), and many others up to 50% in some cases.
Mexico received a last-minute 90‑day extension and continues to face a 25–35% rate depending on product coverage.
Legal Turmoil and Uncertainty
Challenges to the legal basis of the tariffs are underway:
• In May 2025, the U.S. Court of International Trade ruled the tariffs exceeded presidential authority under IEEPA and issued a permanent injunction to halt enforcement.
• That ruling is on hold pending review by the Federal Appeals Court, which is now considering whether the president has the power to unilaterally reshape tariff schedules—a case that could reach the Supreme Court.
Meanwhile, critics warn the tariffs could push up inflation, disrupt global supply chains, and slow economic growth—risks compounded by unpredictable tariff rates week to week.
Industry & Market Reactions
• Consumers: Prices on everyday goods, such as handbags, have already risen by up to 12% due to the end of the $800 de minimis exemption from import duties.
• Exporters: Export-reliant industries in impacted countries are scrambling for last-minute deals and lobbying to avoid punitive rates.
• Global markets: Meanwhile, U.S. stock futures and major indices showed muted reactions, suggesting markets had largely priced in the tariff threat—but broader macro uncertainty remains.
What Lies Ahead
• Negotiations continue: Countries like China face an August 12 deadline before steep tariffs kick in, and South Africa remains in negotiation for a possible concession before facing a proposed 30% levy.
• Legal stakes: If the Federal Circuit ultimately voids the tariffs, the entire structure of the “Liberation Day” regime could unravel—and U.S. importers might be eligible for reimbursement.
• Trade uncertainty: Even deals that reduce rates still entangle countries in American-defined thresholds tied to political leverage and emergency powers—not traditional reciprocal relationships.
Attached is a news article regarding countries that don’t have a US trade deal will face hikes in fees
Article written and configured by Christopher Stanley
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