On July 31, President Trump signed an Executive Order finalizing country-specific reciprocal tariff rates for 69 trading partners to address the persistent US trade deficit. While we are past the August 1 deadline for ‘reciprocal’ tariffs, trade and economic uncertainty persist.
The durability of recent trade ‘deals’ remains uncertain, as Trump continues to tie trade decisions to non-trade issues and the perceived compliance by trading partners. Another wave of tariffs could be triggered if the administration perceives insufficient progress in reshoring manufacturing or if trade partners fail to meet agreed targets, with announcements potentially coinciding with key political milestones or evidence of persistent trade imbalances.
Businesses should plan for continued volatility by closely monitoring policy developments and diversifying supply chains. FGS Global trade experts continue to advise clients on how to navigate the evolving landscape. Read the latest insights from our regional trade experts below.
Sarah Trister, Washington DC: “A disappointing jobs report released August 2 did nothing to diminish the Trump Administration's enthusiasm for its tariff efforts, with the President posting on social media that deadlines will not be extended. However, Trump's reciprocal tariffs posed under an emergency measure still face ongoing legal challenges that may end up before the Supreme Court. A deal with China remains elusive and details of the announced agreements still need to be hammered out, presenting an opportunity for businesses to continue to weigh in. The tariff story is far from over with the results of Section 232 investigations still to be released including on pharmaceuticals, semiconductors, critical minerals, lumber, and others.”
Heather Tory, Ottawa: “Canada did not reach an agreement by the August 1 deadline. The Canadian Government has remained optimistic that a deal can be reached but has signalled to industry that some level of tariffs are here to stay, and support will be needed for the hardest hit sectors. Companies will need to consider the long-term impacts of these tariffs and how to thoughtfully engage with Ottawa at a time of great uncertainty.”
Biancastella de Angelis, Brussels: “Juggling 27 diverging national interests, the European Commission chose to play the long game. Brussels offered grandiose commitments in exchange for preserving its regulatory autonomy and a tariff rate its economy can still stomach. But many details have yet to be agreed. As both sides begin implementing the framework agreement, companies must remain vigilant, reassessing business impacts along the way and reshaping advocacy approaches accordingly.”
Giulia Pasquali, London: “The UK remains the sole trading partner with a 10% ‘reciprocal’ tariff and with the lowest tariffs for autos, aerospace components, steel and aluminium. While Downing Street has been able to minimise the tariffs damage on the UK economy, the US-UK Economic Prosperity Deal only captures around a quarter of UK goods exports to the US, thereby bearing little wider economic benefits. The months ahead will focus on further lowering steel tariffs and progressing on digital trade cooperation, ahead of Trump’s State Visit to the UK on 17-19 September. An announcement on pharmaceutical tariffs is also likely, with the UK once again expected to be granted a lower tariff rate than other trading partners.”
José Parra, Miami: “Mexico’s President Claudia Sheinbaum’s team has succeeded in keeping a balanced discussion with the Trump administration, securing another 90-day extension. While Sheinbaum has not crossed the finish line, her strategy of firmness without being antagonistic, appears to be working so far. In Brazil’s case, Trump imposed 50% tariffs on products such as a coffee and beef, but overall, the trade balance benefits the United States, and the South American country is much less dependent on the US market than Mexico. The latest tariff threats are linked to Trump’s demands that Brazil ends the prosecution of former president Jair Bolsonaro for plotting a coup. This has benefited President Luiz Inázio Lula da Silva, who has positioned himself as a defender of his country’s sovereignty and has markedly improved his lackluster poll numbers from earlier this year.”
Seiji Inada, Tokyo: “The US–Japan trade framework successfully averted a looming 25% tariff threat by limiting reciprocal and auto tariffs at 15%, offering much needed breathing room for Japan’s export economy. However, this was not a legally binding agreement - it rests on administrative assurances, rather than enforceable legal commitments. This institutional setup, together with the quarterly compliance reviews announced by US authorities, introduces a recurring source of uncertainty. Looking ahead, companies and stakeholders will need to closely monitor the implementation and evolving interpretations of key provisions, particularly those related to investment terms, market access, and tariff thresholds.”
Raenette Taljaard, Cape Town: “The impact of new US tariffs on South Africa and the broader customs union in the region will be essentially two-fold. First, it will effectively constrain nascent post-COVID 19 economic recovery that has proven challenging for the broader industrial base and body politic. Second, it may serve to spur greater intra-BRICS and intra-Africa trade under the aegis of the AfCFTA. It will force countries and economies in the region to provide fiscal and other incentives to affected industries and sectors to soften the immediate impact on the industrial base and economic growth.”
To learn more about our trade work, contact the Global Trade Working Group: GlobalTradeWorkingGroup@fgsglobal.com
