President Trump has announced a new set of tariffs after his August 1st deadline for negotiations with countries passed. The new tariff rates will go into effect August 7th for all countries except Canadian and Indian tariffs set to take effect today.
With several executive orders building on and replacing each other to establish tariff rates, the landscape is somewhat confusing to say the least. And although it seems to change by the minute, NAEDA thought it would be helpful at this point in time to update members on where we sit as of now.
The following table of tariff rates are for those countries that dealers are most likely affected by and reflect what equipment will be or is currently subject to. Additional explanatory notes are included below. For a full list of newly announced tariffs, you can view President Trump's Executive Order.
European Union: The 15% tariff established under the trade agreement and now enforced by executive order encompasses farm equipment. NAEDA sent a membership survey earlier this week to aggregate date to make the case for an exemption from those tariffs as the White House has signaled they are open to allowing exemptions for certain strategic products.
Canada: Although President Trump has announced a 35% tariff on Canadian products effective today, the exemption for USMCA compliant goods (those falling under USMCA country of origin rules) remains in effect. This is subject to change. Goods that are transshipped to evade duties (exported to US from Canada, but originating in another country) are subject to an additional 40% tariff on top of originating country tariff rates, and could be subject to fines and penalties
Mexico: Similar to Canada, USMCA compliant goods are exempt from the current 25% tariff and proposed 30% tariff rate that is being delayed for 90 days. This is also highly subject to change. The same transshipment rates and penalties for Canada apply to Mexico.
India: The 25% tariff rate announced is effective immediately and President Trump has signaled additional penalties are possible. The tariff rate was imposed unilaterally because a trade deal was not reached. This rate is highly subject to change.
China: Nothing in the executive order affected the temporary negotiated tariff rate of 30% on Chinese imports. That rate is set to expire August 12th and potentially revert to the 145% tariff rate President Trump previously imposed. The established rate is highly volatile and subject to change.
Japan, South Korea, UK: These tariff rates were established by bilateral trade agreements and seem relatively stable for the foreseeable future.
Brazil: President Trump has imposed a 40% retaliatory tariff on top of the baseline 10% tariff for that country, bringing the total tariff to 50% currently, the highest of any nation at the moment. Brazil has not reached a trade agreement with the US and this is highly subject to change.
NAEDA will continue monitoring and updating dealers on the changing tariff landscape and pursue exemptions where possible, although few industries have garnered any traction in escaping tariffs. For now, the EU bilateral trade agreement is the only one that has signaled an avenue for pursuing an exemption for equipment and we will be making the case. If you have additional questions or comments at this time, please contact us.
