Tariff Turbulence: An Update on U.S. Trade Policy and Global Impacts

The United States continues to actively reshape its global trade relationships through a combination of targeted tariffs and strategic trade agreements. In just the first seven months of the year, it has been reported that tariff collections have generated an estimated $172 billion in revenue. The increased collection is largely driven by new reciprocal tariffs and updates to long-standing agreements.

Amid this recalibration, the U.S. has executed or advanced negotiations on more than a dozen trade deals, impacting over $350 billion in annual bilateral trade. The administration is expecting more deals to be finalized, and negotiations are ongoing, which leads to a dynamic landscape where tariffs are not only economic instruments but also geopolitical negotiating chips. The nature of tariff implementation has caused many challenges for U.S. business owners, and it is important to monitor the landscape to understand how partnerships with certain countries may impact your business and supply chains.

Below is a country-by-country breakdown of the trade landscape with the top U.S. trade partners.

Breakdown of U.S. trade relationships

European Union ($78.2B in trade)

A major agreement was reached on July 27, 2025, establishing a 15% tariff ceiling on most EU exports to the U.S that includes automobiles and automotive parts. A 50% tariff still remains on EU steel, aluminum, and copper. Negotiations are ongoing to reduce these through quota-based exemptions. Goods with a General Duty greater than 15% will not be subject to reciprocal tariffs, but goods with a General Duty less than 15% would be subject to 15% minus the Column 1 General Duty rate.

In return, the EU will purchase $750 billion in U.S. energy products over three years and invest $600 billion in American sectors by 2029. The EU has committed to not imposing new retaliatory tariffs.

Mexico ($74.5B in trade)

On July 12, the U.S. announced a sweeping 30% tariff on Mexican imports, effective August 1, citing trade imbalances. Mexican President Claudia Sheinbaum condemned the move as "unjustified" and has warned of retaliatory measures. However, some goods may be spared under USMCA rules of origin, offering a potential buffer for cross-border businesses.

Canada ($57.6B in trade)

In a July 10 letter, President Trump notified Canadian Prime Minister Mark Carney of a new 35% "reciprocal" tariff under the International Emergency Economic Powers Act (IEEPA). They will be imposed as of August 1, unless new terms are agreed upon. Canada, in turn, is preparing to adjust its countermeasures to match the elevated Section 232 tariffs, which now sit at 50%. While the exact Canadian retaliatory rates remain undisclosed, August promises high-stakes developments.

China ($27.0B in trade)

A 90-day tariff pause with China ends on August 12, and unless a new agreement is reached, tariffs will spike from 10% to 34%. Ongoing talks have proposed an extension, but approval remains pending from the White House. China’s status as both a geopolitical rival and an indispensable trade partner makes this one of the most closely watched negotiations.

Taiwan ($21.1B in trade)

Tariffs on Taiwanese goods were originally scheduled at 32%, paused for 90 days in April, but that pause expired on August 1. A deal has been reached, and Taiwan’s effective tariff rate is now 20%. 

Japan ($19.1B in trade)

The newly signed U.S.–Japan Strategic Trade and Investment Agreement is among the most cooperative. Japan will invest $550 billion into a U.S. strategic vehicle focused on key industries such as semiconductors and shipbuilding. In return, the U.S. scaled back its proposed 24% tariff to a more palatable 15% baseline, while gaining greater access to Japanese markets in agriculture, energy, and aerospace.

Vietnam ($17.3B in trade)

The U.S. has reduced its previously imposed 46% tariff on Vietnamese imports to 20%. Vietnam has agreed not to retaliate and will enforce a 40% duty on transshipped goods, a move aimed at curbing indirect Chinese exports. The more moderate tone signals a pragmatic partnership focused on compliance and trade discipline.

South Korea ($16.9B in trade)

Facing an impending 25% tariff, there is a preliminary agreement to lower the South Korean tariff rate to 15%. While the agreement carries immediate policy implications, there has been no formally signed and ratified agreement. As discussions continue key differences remain between the U.S. and South Korean officials. 

In exchange for the reduction, South Korea has committed to $350 billion investment in U.S.-controlled assets, $100 billion purchase of liquified natural gas, and full market access for U.S. goods including cars, trucks and agricultural products.  

This preliminary agreement does not officially revoke the existing KORUS Free Trade Agreement, but it does mark a departure from those rules. The existing FTA now functions more as a basic framework with specific arrangements and concessions that supersede some of its original provisions. 

India ($13.3B in trade)

The U.S. confirmed on July 30 that a 25% tariff on Indian exports will go into effect on August 1 after trade talks stalled. A sixth round of negotiations is expected mid-August, but New Delhi has yet to signal any softening on key issues. The standstill reflects broader complexities in U.S.–India trade, where strategic alignment does not always equate to commercial agreement.

United Kingdom ($12.9B in trade)

The Economic Prosperity Deal, signed May 8, established a 10% baseline tariff on British exports, one of the lowest among peers. Importantly, the U.S. has spared UK pharmaceuticals from additional tariffs and is considering preferential treatment pending ongoing investigations. The deal also introduced key tariff-rate quotas and exemptions:

• Automobiles: 7.5% tariff on the first 100,000 UK-made vehicles.
• Auto Parts: 10% total duty.
• Aerospace: No Section 232 or reciprocal tariffs on qualifying goods.

Evaluate tariff impact on your business and strategize to improve margins

The global trade environment has become fragmented, marked by tailored agreements, aggressive tariff deployments, and politically motivated economic strategies. While some countries like Japan and the UK have embraced strategic investment and cooperation, others like Mexico and India are bracing for hardline tariff enforcement. August is shaping up to be a defining month, with multiple key deadlines set to either escalate tensions or open the door to renegotiation.

As the landscape shifts, U.S. businesses must stay alert to fast-moving developments, reassess their supply chains, and prepare for contingencies. Strategic planning, especially with the aid of experienced tariff advisors, has never been more essential.

Fill out the form on this page to connect with our Tariff Support specialists to evaluate current tariff exposure, ensure compliance, and discuss strategy to mitigate impact through free trade zones, country of origin, sourcing, and review of harmonized tariff schedules.