On the eve of additional, country-specific reciprocal tariffs going into effect on August 1, President Trump announced an agreement to pause higher tariffs on Mexico for another 90 days. In a Truth Social post on July 31, Trump stated that he had a “very successful” telephone conversation with the President of Mexico, Claudia Sheinbaum, in which it was “agreed to extend, for a 90 Day period, the exact same Deal as we had for the last short period of time, that Mexico will continue to pay a 25% Fentanyl Tariff, 25% Tariff on Cars, and 50% Tariff on Steel, Aluminum, and Copper.” Trump indicated that the U.S. will talk to Mexico over the next 90 days with a goal of signing a trade deal within that period of time, “or longer.”
It has indeed been a busy week, with several other trade deals emerging, including a deal with Pakistan being reported today that includes an agreement with respect to a U.S. partnership to develop Pakistani oil reserves.
On July 30, Trump announced a preliminary trade agreement with South Korea, in which the United States will impose a 15% duty on South Korean goods with no additional tariffs on U.S. exports to South Korea. It appears that South Korea may also eliminate some of the tariffs that it currently imposes on imports of U.S. products (e.g., certain agricultural products), but the details are not entirely clear yet. Notably, South Korean steel and aluminum imports into the United States are set to remain subject to 50% Section 232 tariffs. Under the deal, South Korea reportedly pledged to invest $350 billion in U.S. projects – South Korea has said that $150 billion has been earmarked for shipbuilding cooperation and that the remaining $200 billion will involve investments in chips, batteries, biotechnology, and nuclear energy cooperation. South Korea will also reportedly purchase $100 billion worth of natural gas or other energy products from the U.S.
On July 28, the White House also announced an agreement with the EU, saying Americans will have “unprecedented levels of market access to the European Union.” Under the terms of the deal, the EU avoided the 30% tariffs threatened by the President in his Tariff Letter to the EU; instead, the EU will see 15% duties on most goods, including pharmaceuticals and semiconductors. This is significant in so far as it appears to head off potential additional tariffs that were expected to be imposed on EU pharmaceuticals and semiconductors pursuant to ongoing Section 232 investigations. There have also been reports that some generic drugs may be exempted from the 15%. In contrast, the White House said that Section 232 tariffs on EU steel, aluminum, and copper will remain unchanged. The EU also reportedly agreed to purchase $750 billion in U.S. energy and make new investments in the United States of $600 billion by 2028.
In addition, several other trade measures and tariff rates were declared on July 30:
- The President announced a 25% tariff on India, in addition to unspecified “penalties” due to India’s purchases of Russian oil. The two countries have been in the middle of negotiations ahead of the August 1 deadline but had not been able to reach a deal before Trump’s announcement.
- Trump also signed an executive order to impose 50% tariffs on Brazil, which he had earlier threatened to levy, based on “[r]ecent policies, practices, and actions of the Government of Brazil” which allegedly “threaten the national security, foreign policy, and economy of the United States.” Specifically, the executive order states that members of the Brazilian government “have taken actions that interfere with the economy of the United States, infringe the free expression rights of United States persons, violate human rights, and undermine the interest the United States has in protecting its citizens and companies.” Certain products are excluded from the 50% tariff, including civil aircraft and parts, aluminum, tin, wood pulp, energy products, orange juice, and fertilizers, among others.
