Trump Adjusts Tariff Rates Amid National Security Concerns

President Donald Trump has enacted an Executive Order to adjust tariff rates in response to significant trade deficits, which he claims threaten national security. The new measures will affect various countries, imposing higher duties on imports from Iraq, Brazil, and Syria, while maintaining a 10% duty on goods from other nations. The updated tariff structure aims to address foreign trade practices and their impact on U.S. manufacturing and supply chains. This order also includes penalties for transshipment schemes and will be overseen by senior officials to ensure compliance. The changes will take effect shortly, raising questions about their implications for global trade relations.

By Narendra Chaudhary Aug 1, 2025, 09:42 IST

New Executive Order on Tariffs

In a recent move, President Donald Trump signed an Executive Order aimed at modifying reciprocal tariff rates. This action builds on the national emergency declared earlier this year under Executive Order 14257, addressing significant U.S. trade deficits that Trump claims threaten both national security and the economy.

Utilizing powers granted by the International Emergency Economic Powers Act (IEEPA), the National Emergencies Act, and the Trade Act of 1974, Trump indicated that these new measures respond to recommendations from senior officials regarding foreign trade practices and their effects on U.S. exports, manufacturing, and supply chains.

The Executive Order states, 'In Executive Order 14257 of April 2, 2025, I found that conditions reflected in large and persistent annual U.S. goods trade deficits constitute an unusual and extraordinary threat... I declared a national emergency... and imposed additional ad valorem duties that I deemed necessary and appropriate.'

The updated order introduces revised ad-valorem duties on goods from certain trading partners, replacing previous rates. Goods from other nations will still incur a 10% duty as per the amended Executive Order 14257.

The revised Harmonized Tariff Schedule of the United States (HTSUS) will be updated and will take effect seven days after the issuance of the order. Goods in transit before the deadline and entered prior to October 5, 2025, will be exempt from these changes.

Under the new rates, Iraq will face a 35% duty, while Laos and Myanmar will see a 40% duty. Switzerland's rate is set at 39%, and Syria will incur a 41% duty. India’s tariff is established at 25%, Brazil at 50%, and the United Kingdom at 10%. The European Union will have a conditional structure: goods with a Column 1 Duty Rate below 15% will see an increase to 15%, while those at 15% or higher will not face additional duties.

Trading partners currently in negotiations with the U.S. regarding trade and security will continue under the new tariff framework until further orders are issued.

The Executive Order also enforces strict penalties on transshipment schemes. Goods identified by U.S. Customs and Border Protection (CBP) as having been transshipped will incur a 40% ad-valorem duty in addition to other penalties. A list of countries and facilities involved in such schemes will be published biannually to assist in procurement and security evaluations.

Oversight of the implementation will be managed by the Secretary of Commerce, Secretary of Homeland Security, the United States Trade Representative, and other senior officials, who are empowered to take necessary actions, including updates to the HTSUS and issuing guidance.

The Commerce Secretary and the USTR are tasked with continuously monitoring the national emergency situation and recommending further actions if foreign partners do not take appropriate measures or retaliate.

The order concludes with a note that its implementation will align with applicable laws and depend on the availability of appropriations, with publication costs covered by the Office of the United States Trade Representative.