Trump raises base tariff to 15%, hints at 50% cap ahead of Aug 1 deadline

Business Standard

5 days ago

US President Donald Trump announced that there will be a baseline tariff starting at 15 per cent and going up to 50 per cent on all imports, during an artificial intelligence summit in Washington on Wednesday (local time).
'We'll have a straight, simple tariff of anywhere between 15 and 50 per cent,' Trump said, adding that countries with which the US has strained diplomatic ties could face duties at the higher end of the range.
Trump administration confirms August 1 deadline
The announcement comes just days before the revised rates are set to take effect on August 1, and marks a shift from Trump's earlier stance. At the beginning of July, the administration had proposed tariffs between 10 and 15 per cent on imports from over 150 countries.
Commerce Secretary Howard Lutnick reiterated the timeline in a CBS News interview on July 20, noting that many smaller economies in Latin America, the Caribbean, and Africa would face lower tariffs closer to 10 per cent.
' The new rates will be effective from August 1,' Lutnick had confirmed. 'That's a hard deadline. Countries can still negotiate after that date, but the tariffs will apply in the meantime.'
White House prioritises tariff-based deals over formal trade pacts
In a significant departure from conventional trade diplomacy, the White House is now treating tariff notifications themselves as de facto deals. A report by Bloomberg suggests that President Trump is moving away from formalised trade agreements and using tariff levels to set the terms of engagement.
Canadian Prime Minister Mark Carney said earlier this month that few nations should expect tariff-free access. 'There's not a lot of evidence right now that we're going to get a tariff-free deal,' he noted. 'The global trade landscape has fundamentally changed.'
Reduced tariffs for pro-US markets
Despite the steep tariff band, Trump has indicated that nations willing to open their markets to US firms could secure lower duties.
One such example is Japan. Trump confirmed this week that a planned 25 per cent tariff on Japanese goods had been lowered to 15 per cent after Tokyo agreed to lift import restrictions and back a US-led investment plan worth $550 billion.
The European Union is also engaged in ongoing talks. 'If they agree to open up the union to American businesses, then we will let them pay a lower tariff,' Trump said, adding that a simplified rate structure would apply where detailed negotiations were not feasible.
India seeks interim trade pact before deadline
India is among the countries racing to finalise a bilateral arrangement. Five rounds of negotiations have taken place since March 2025, with the latest held in Washington between July 14 and 18.
Talks are reportedly focused on market access for US tech firms, easing agricultural regulatory barriers, and lowering duties on Indian exports such as pharmaceuticals and textiles. While a formal deal has yet to be announced, both sides have expressed interest in fast-tracking an interim agreement before the August deadline.
India-UK likely to sign FTA today
India and the UK are set to sign a landmark Free Trade Agreement (FTA) on Thursday, marking a major milestone in their bilateral relationship. The deal, set to be signed by Prime Ministers Narendra Modi and Keir Starmer at Chequers, comes after years of negotiations and is expected to significantly boost trade and investment between the two nations. Commerce Minister Piyush Goyal and UK Trade Secretary Jonathan Reynolds will formalise the pact, followed by a business summit featuring top Indian and British executives. The agreement will reduce, and in some cases eliminate, tariffs on the vast majority of goods traded between the two countries, enhancing Indian exports in sectors like textiles, jewellery, and leather, while also increasing UK access to the Indian market.