President Trump’s punishing new tariffs on about 90 countries snapped into place on Thursday, sending foreign leaders in some of the hardest-hit economies scrambling to contain the damage and convince Washington to ease its escalating trade brinkmanship.
Few of America’s major trading partners were spared under the updated duties, which together sent the average effective U.S. tariff rate to its highest level in nearly a century. Despite the outcry, Mr. Trump remained ebullient as he heralded the higher rates as a lucrative political coup and his aides signaled even harsher duties could be on the horizon.
The president’s levies — which are expected to drive up prices for American consumers, and have spooked many businesses around the world — officially took effect just after midnight. They arrived one week after Mr. Trump signed a set of executive orders that raised rates and put into force the preliminary trade agreements that the administration had reached in recent days with the European Union and other countries.
The president has long maintained that these levies would help reset trade relationships that he deems unfair, raise new revenue for the U.S. government, spur more U.S. manufacturing and achieve other goals. Just before the tariffs took effect, Mr. Trump took to social media to celebrate them as a fiscal success, claiming in all caps that “billions of dollars in tariffs are now flowing into the United States of America!”
Around the world, however, the mood proved more dour. Particularly in Southeast Asia, foreign leaders continued to press Mr. Trump to relax his tariffs or better explain his new trade policies, fearful of the effect on their industries and workers.
In Switzerland, officials labored unsuccessfully to persuade the White House to reduce a surprisingly high 39 percent tariff on its goods. And India continued to push back against Mr. Trump after he announced he would soon be doubling tariffs on that country, with one local policymaker calling the president a “bully.”
Wall Street generally shrugged off Mr. Trump’s tariffs, a dramatic reversal from only four months earlier, when the president’s initial slate of duties provoked a worldwide sell-off before the White House paused its plans. The S&P 500 stock index was little changed at noon on Thursday.
But the latest expansion of Mr. Trump’s trade war seemed unlikely to pass without consequence.
In the United States, some experts reprised their concerns that these moves might soon unleash new economic shocks. Even before the new tariffs took effect, a growing number of businesses had begun to warn that they may no longer be able to absorb the rising costs of imported components and supplies.
In recent weeks, prices have started to climb, with the latest monthly measure of inflation showing that appliances, clothing and furnishings had become more expensive. The economy has grown, but only at an anemic pace, and some analysts predict little improvement through the remainder of the year. The labor market has experienced its own strains, with hiring slowing sharply in July.
Olu Sonola, the head of U.S. economic research at Fitch Ratings, said the economy was just “starting to see” the effects of the tariffs that Mr. Trump announced in the spring, adding that with the president’s newest duties now in place, Americans would “see that magnified” in coming months.
With Mr. Trump’s actions on Thursday, the U.S. effective tariff rate now exceeds 18 percent, the highest level since 1934, according to an estimate earlier this month by the Budget Lab at Yale. For American households, those duties may add up to price increases, resulting in an average annual loss of $2,400, the Yale research center found. And for the broader economy, it could translate to a drop in output, shaving off half a percentage point in growth starting in 2025.
The rates start at 15 percent, targeting imports from countries including Bolivia, Ecuador, Iceland and Nigeria. Others, like Taiwan, have a 20 percent tax applied to items sold to U.S. buyers. Mr. Trump also imposed a much higher 50 percent tariff on some goods from Brazil. He cast the sky-high rate as punishment for Brazil’s decision to prosecute his political ally Jair Bolsonaro, the country’s former president, for trying to stay in power after losing an election.
In general, the new round of duties does not apply to foreign goods that had been loaded onto ships just before Aug. 7. Those products in transit won’t be subject to new taxes so long as they enter the United States before early October, perhaps opening the door for importers to amass more inventory before the steepest rates cut into their bottom lines.
Many smaller countries’ exports have faced 10 percent tariffs since the president first announced, then suspended, an initial wave of policies in April. Others have staved off eye-watering rates after brokering deals with the United States that set their tariffs generally between 15 and 20 percent.
That includes the 27-member European Union, as well as Japan, South Korea and Vietnam. Each of those governments promised to open its market to U.S. goods, and in some cases they pledged to invest billions of dollars in American industries. But the exact terms of those deals remain murky.
Separately, Mr. Trump imposed a 35 percent tariff on goods from Canada not covered by the U.S.-Mexico-Canada trade agreement. The Canadian levies took effect last week. Similarly high rates have been suspended for Mexico while the two sides keep talking. And duties on Chinese goods remain at 30 percent under an agreement brokered between the superpowers this year, though the truce is set to expire on Aug. 12.
On Thursday, Howard Lutnick, the commerce secretary, signaled the United States was “likely” to extend that deadline for 90 days as negotiations continue. But Mr. Lutnick did not rule out other tariffs on China, as the Trump administration begins to explore another salvo of trade activity, this time focused on countries that buy oil from Russia.
The White House believes these tariffs might put new pressure on the Kremlin, cutting off a key financial lifeline and helping to end its war with Ukraine. Mr. Trump announced earlier this week that he would double duties soon on India, another major buyer of Russian energy, later prompting that country’s prime minister, Narendra Modi, to insist India would “never compromise.”
Other foreign leaders were left to piece together the unresolved details on Mr. Trump’s newly imposed tariffs, particularly how he would carry out his promise to impose an additional 40 percent tax on goods shipped through lower-tariff countries, a tactic known as transshipment. The threat loomed especially large over Southeast Asia, raising fears that countries like Cambodia could be punished for the rush of Chinese factories that had set up shop there in recent years to produce goods for sale globally.
The rates that took effect on Thursday are unlikely to be the final chapter in the expanding trade war, which faces a series of legal challenges in federal courts. The president still plans to impose additional tariffs on foreign-made medicines, computer chips and other products.
On Wednesday, Mr. Trump said the forthcoming tariffs on semiconductors, which have not been formally announced, would be set at 100 percent. Mr. Lutnick, who spoke on Fox Business Network, offered new details about that proposal a day later, explaining that there would be an exemption for U.S. companies that attest to the government that they are working to make the powerful computer chips domestically.
The threat reverberated globally, particularly in Taiwan, which produces most of the world’s semiconductors. Yen Huai-Shing, a representative from Taiwan’s trade negotiation office, told reporters that the country was still working hard to secure “favorable treatment” on any tariffs affecting chips.
In the days since Mr. Trump unveiled his harsh duties, the president has sought to dismiss evidence that his policies may be upsetting the U.S. economy, claiming instead this week that “costs are way down” and that the country would experience “unprecedented” growth.
But Mark Zandi, chief economist for Moody’s Analytics, said the tariffs threatened to create an environment that was “very stagflation-esque,” referring to the risk of a stagnant economy with inflationary prices.
That, he added, would add to the challenge facing the Federal Reserve at a time when Mr. Trump is demanding lower interest rates.
“Growth is slowing,” Mr. Zandi said. “It’s happening, and it’s going to become much more obvious.”
So far, the U.S. economy has sidestepped the most dire predictions of a recession. But many experts say it was always going to be a matter of time before tariffs unleashed real, noticeable effects, especially because many businesses stockpiled imports before the steepest rates took effect.
Matthew Martin, a senior economist at Oxford Economics, said businesses had worked their way through those inventories since the president announced, but quickly suspended, his original slate of steep tariffs in April.
With tariffs climbing again, Mr. Martin continued, so will prices: “That is something that’s going to accelerate over the next couple months.”
Sui-Lee Wee, Meaghan Tobin, Erin Mendell, Xinyun Wu, Alex Travelli, River Akira Davis and Liz Alderman contributed reporting.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
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