US raises tariffs to highest level in a century as trade partners panic
Trump’s new tariff system takes effect, ushering in highest duties in a century
Donald Trump’s new tariff regime came into force at 12:01 a.m. Washington time on Thursday, raising duties to their highest levels in a century as the U.S. president launched a new era of trade confrontation.
The Financial Times reports that the increase was implemented despite intense lobbying by foreign capitals to avoid the tariffs that support Trump’s economic agenda.
Swiss President Karin Keller-Sutter returned to Switzerland on Wednesday after failing to secure an exemption from Trump’s harshest tariffs. Taiwan, a key chip exporter, also failed to reduce its tariff rate.
Trump’s new system follows months of threats and revisions and introduces so-called reciprocal tariffs on nearly all foreign countries, as the president aims to reshape the global trade framework built over decades.
“This is a big deal because now there are official new tariffs,” said Ted Murphy, a trade lawyer at Sidley Austin in Washington. “It’s a big deal because these tariffs change everything. This is the beginning of a new trade system and the end of the old one.”
Other analysts highlighted the vast number of new duties now facing U.S. trading partners.
“We’re in a new world now. Even for trade experts, the complexity is just staggering,” said Chad Bown, senior fellow at the Peterson Institute for International Economics.
The reciprocal tariffs will increase duties even for economies with newly signed trade deals with the U.S., including the EU and Japan. China, the world’s largest exporter, is a separate case: its trade war ceasefire agreement with Washington expires on August 12.
Mexico also agreed to a 90-day pause on new tariffs, but new high duties on Canada — another U.S. partner in the North American trade deal — have already taken effect.
Trump also announced plans to soon impose tariffs on pharmaceuticals, consumer electronics, and other sectors currently exempt from the reciprocal duties.
On Wednesday, he declared his intention to impose a 100% tariff on chip imports, though he did not specify when, and left the door open to exemptions for companies that invest in the U.S.
The new system takes effect just hours after the U.S. raised future tariffs on India as punishment for purchasing Russian oil — a sign that Trump is ready to use trade warfare to pursue geopolitical aims.
The August 7 tariff rollout marks the second time the president has ordered U.S. customs authorities to apply sweeping reciprocal tariffs. In April, he began implementing the tariffs before partially suspending them.
Although the new reciprocal tariffs are mostly lower than those announced on April 2 — dubbed “Liberation Day” — they still raise the U.S.’s effective tariff level to its highest in decades.
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