Staggering US tariffs begin as Trump widens trade war

President Donald Trump’s punishing new tariffs on more than 90 countries snapped into place after the stroke of midnight Thursday, the latest escalation in a global trade war that has started to exact a toll on the U.S. economy.

Few of America’s major trading partners were spared under Trump’s updated slate of duties, which together have sent the average effective U.S. tariff rate to its highest level in nearly a century. In the hours before the import taxes took effect, the president signaled there would be more to come, as he doubled down on a strategy that has driven up prices, constrained growth and spooked consumers and businesses around the world.

Trump announced the new rates in a series of executive orders he signed last week, some of which formalized the preliminary trade agreements that he had reached in recent days with the European Union and other countries. The president has long maintained that these levies would help reset trade relationships that he deems unfair, raise new revenue for the U.S. government, spur more U.S. manufacturing and achieve other goals.

Trump’s tariffs have indeed helped generate money — roughly $152 billion through July, recent data show — while global financial markets Thursday generally shrugged off the renewed trade brinkmanship. But the president’s policies have not been without consequence. A growing number of businesses have warned recently that they may no longer be able to absorb the rising costs of imported components and supplies.

As a result, prices have started to climb, with the latest monthly measure of inflation showing that appliances, clothing and furnishings had become more expensive. The economy has grown, but only at an anemic pace, and some analysts predict little improvement through the remainder of the year. The labor market has experienced its own strains, with hiring sharply slowing in July.

Olu Sonola, the head of U.S. economic research at Fitch Ratings, said the economy was just “starting to see” the effects of the tariffs that Trump announced in the spring, adding that with Trump’s newest duties now in place, Americans would “see that magnified” in coming months.

The tariffs start at 15%, targeting imports from countries including Bolivia, Ecuador, Iceland and Nigeria. Others, like Taiwan, have a 20% tax applied to items sold to U.S. buyers. Trump also imposed a much higher 50% tariff on some goods from Brazil. He has cast it as punishment for Brazil’s decision to prosecute his political ally Jair Bolsonaro, the country’s former president, for seeking to stay in power after losing an election.

And on Wednesday, Trump said he would raise tariffs on India to 50% by late August for buying Russian oil. The president has signaled he could impose similar penalties on other countries, as he looks for ways to use trade policy to pressure Russia into halting its war against Ukraine.

In general, the new round of duties does not apply to foreign goods that have been loaded onto ships just before Thursday. Those products in transit won’t be subject to new taxes so long as they enter the United States before early October, perhaps opening the door for importers to amass more inventory before the steepest rates cut into their bottom lines.

Many smaller countries’ exports have faced 10% tariffs since the president first announced, then suspended, his initial tranche of policies in April. Other have staved off eye-watering rates after brokering deals with the United States that set their tariffs generally between 15% and 20%.

That includes the 27-member European Union, as well as Japan, South Korea and Vietnam. Each of those governments promised to open its market to U.S. goods, and in some cases they pledged to invest billions of dollars in American industries. But the exact terms of those deals remain murky.

Separately, Trump imposed a 35% tariff on goods from Canada not covered by the existing U.S.-Mexico-Canada trade agreement. The Canadian levies took effect Friday. Similarly high rates have been suspended for Mexico while the two sides keep talking. And duties on Chinese goods remain at 30% under an agreement brokered between the superpowers this year, though the truce is set to expire Tuesday.

“IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!” Trump proclaimed just before the deadline in a post on social media.

Around the world, the mood was decidedly more tense, as foreign leaders scrambled to make sense of Trump’s dizzying array of policies. From Taiwan to Switzerland, some countries scrambled without success to head off punishing tariffs in a last-minute rush of diplomacy.

Others were left to piece together the unresolved details, particularly how Trump would carry out his promise to impose an additional 40% tax on goods shipped through lower-tariff countries, a tactic known as transshipment. The threat loomed especially large over Southeast Asia, raising fears that countries like Cambodia could be punished for the rush of Chinese factories that had set up shop there in recent years to produce goods for sale globally.

But the rates that took effect Thursday are unlikely to be the final chapter in Trump’s expanding trade war, which faces a series of legal challenges in federal courts. He still plans to impose additional tariffs on foreign-made medicines, computer chips and other products.

On Wednesday, Trump said the forthcoming tariffs on semiconductors, which have not been formally announced, would be set at 100%. The president shared his thinking at a White House event alongside Tim Cook, the CEO of Apple, which had pledged to invest an additional $100 billion in the United States. Trump signaled that the taxes may be relaxed on companies seeking to produce more of the critical high-tech chips domestically.