From AFOA General Counsel, Olsson Frank Weeda:
Country-Specific Reciprocal Tariff
President Trump has now issued tariff letters to 25 countries in total. These letters lay out the country-specific reciprocal tariff rates that will apply to those countries’ goods as of 12:01 a.m. EDT on August 1st, i.e., when the latest extension to the pause in the imposition of country-specific reciprocal tariffs expires.
The newest tariff letters were issued to the European Union and Mexico over the weekend. Last Friday night (July 11, 2025), President Trump announced on social media that starting August 1, 2025, the U.S. will impose 30% tariffs on EU-origin products imported into the U.S. Similarly, Last Friday night (July 11, 2025), President Trump announced on social media that starting August 1, 2025, the U.S. will impose 30% tariffs on Mexican products imported into the U.S. in response to the continued illicit flow of fentanyl across the southern border.
Terms outlined in the two tariff letters mirror those in the tariff letters released last week:
- New tariff rates will take effect on August 1.
- The letters state that the tariff rates are separate from “Sectoral Tariffs.” While it is unclear, that language suggests that the new tariff rate could potentially be stacked on top of (imposed in addition to) Section 232 tariffs on various industrial sectors.
- Goods determined to be “transshipped” to evade a higher tariff will be subject to a higher tariff. There is no definition of this key term.
- Tariffs can be modified, upward or downward, depending on the continued relationship between the US and the specified country.
- Any retaliatory tariff rate will be added to the reciprocal tariff rate specified in the letter.
USMCA Exemption
Trump’s letter to Mexico did not address if USMCA-compliant goods would still be exempt from the Mexico tariffs after Aug. 1. The White House reportedly told news outlets last week that the USMCA exemption would still apply under the Canada’s 35% tariff, but stressed that could change; it is unclear if this same rationale would be applied to goods produced in Mexico.
European Union Reaction
The European Commission President Ursula von der Leyen announced yesterday that the EU’s countermeasures, established in response to President Trump’s initial import taxes on steel and aluminum which were scheduled to take effect tomorrow (July 15) have been extended until early August to provide room to negotiate a solution with the U.S. The EU trade ministers met today to discuss how to respond to Trump’s letter and contingency plans if negotiations fail to avert the announced 30% tariff rate.
Mexico Reaction
During today’s press conference, Claudia Sheinbaum, President of Mexico, said progress has been made in U.S. bilateral trade discussions regarding security and combating fentanyl trafficking. She stated that only minor details remain.
On-going Trade Negotiations with Other Countries
South Korea says that a framework US trade deal may be possible by August 1. It has signaled some willingness to allow greater U.S. access to farm markets to achieve this deal.
India and US trade representatives are currently meeting in D.C. to negotiate a trade deal.
Possible “Secondary” Tariffs on Russia
During a press conference with NATO Secretary General Mark Rutte, Trump warned that if Russia does not agree to a peace deal with Ukraine within 50 days, the U.S. will impose “secondary tariffs” of 100% on countries that continue doing business with Russia. Such “secondary” tariffs would be similar to the secondary tariffs on countries purchasing oil from Venezuela which Trump threatened to impose earlier this year. The scope and mechanism of any such secondary tariffs on Russia was not provided.
New Section 232 Tariff Investigations
The U.S. Department of Commerce announced today the initiation of two new Section 232 national security investigations—one targeting polysilicon and its derivatives, and the other focusing on unmanned aircraft systems. Notably, the scope of “polysilicon derivatives” was not defined in the announcement. If Commerce determines that imports of these products threaten US national security, President Trump can impose Section 232 tariffs on imports of these products, similar to those currently imposed on steel and aluminum and derivative articles of steel and aluminum and automobiles and auto parts.
Polysilicon derivatives are critical components used in the manufacturing of semiconductor wafers and solar technologies. Their inclusion in the investigation suggests an intent to broaden the scope of scrutiny on semiconductors and the electronics supply chain, which are already the subject of a separate Section 232 investigation.
We will continue to circulate an end-of-day summary of significant trade developments throughout the week and share further updates as letters are issued.