Here is a concise update on the current US tariff situation. The terms and requirements continue to change and are subject to final approvals by the countries involved and acceptance by the US.
The overall objectives seem to be settling into a goal of getting fairer trade terms to the benefit of the US compared to what the past terms have been.
It has been very disruptive of normal practices of international diplomacy. Hoping for resolutions soon and a return to more stable business!
Current Tariff Situation
- Average Effective Tariff Rate: Impact of 14.7% (post-substitution).
- The impact on US consumers is reported less than 2% of a family budget including substitution or sourcing changes.
- Real GDP Effects estimated: -0.6 % lower real GDP growth in 2025, with a long-run impact of -0.34%.
- Trade Negotiations: The US is engaged in negotiations with many countries with some seem near final agreements. And others are progressing quickly (Indonesia, India, and Japan).
Tariffs by Country/Region
- China: A temporary 90-day truce is in place until 12 August, freezing US tariffs on Chinese goods at 55% and China's retaliatory tariffs at 10%.
- Canada and Mexico:
USMCA Treaty: Qualified trade within the rules of the treaty are still duty-free, with some exceptions like steel and aluminum.
- Qualified trade within the rules of the USMCA treaty are still duty free. Rules are tight already on qualifications within the treaty. There are some exceptions like steel & aluminum trade.
- Wholly Obtained or Produced: Goods entirely produced or obtained within the US, Mexico, or Canada.
- Regional Value Content (RVC): Goods meeting specific RVC requirements, calculated using the Transaction Value Method (TVM) or Net Cost Method (NCM).
Other (non-USMCA):
o Most non-USMCA imports from Mexico and Canada are subject to a 25% tariff.
o The US and Mexico are nearing a deal to allow Mexican steel to enter duty-free or reduced rates. The 50% tariff on steel and aluminum imports from Canada and Mexico remains effective since June 4, 2025.
o Automobile Tariffs: A 25% tariff on imported cars and auto parts, with some exemptions.
- UK: The US and UK have announced a new trade agreement that reduces tariffs on certain British imports, including aerospace, cars and metals. The agreement awaits finalization.
- Other Countries:
- General Tariffs: Other countries may face higher tariffs, starting with a 10% baseline tariff.
- Country-Specific Tariffs: These tariffs are expected to vary by country and negotiations by each with US.
- Exceptions and Quotas: Some countries may have exceptions or quotas for specific products, like the UK's agreement on metals.
Conclusion
This is an active process that we all hope will be settled soon. In the meantime, we need to do what good logistics teams always do. Be flexible. Be ready for new ideas and solutions. Know who your best partners are and work closely with them. Build up your team and build out your own professional network inside and outside of the company you run or work for!
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