On July 31, President Trump signed the executive order “Further Modifying the Reciprocal Tariff Rates” which, as the name makes obvious, contains adjustments on the you-know-what.
The order, in Annex I, contains a very clear chart that shows the tariff rate by country. Annex II is the legal text. The changes took effect on August 7.
What the Order Does
This order reinstates the country-specific reciprocal tariff framework that was first announced on April 2, 2025 (“Liberation Day”) and then largely suspended for 90 days — twice — to allow for trade negotiations. That suspension period expired July 31. The order sets new country-specific rates reflecting the outcome of those negotiations, adjusting rates up or down based on what each trading partner agreed to, failed to agree to, or did during the negotiating period.
The structure remains the same as Liberation Day: a 10% baseline tariff applies to all countries not specifically listed in Annex I, and country-specific rates ranging from 10% to 41% apply to the roughly 70 countries that are listed. For countries that reached deals or framework agreements with the U.S., rates generally came down from what was originally announced on April 2. For countries that retaliated or failed to engage meaningfully, rates stayed elevated or increased.
Key Country-Specific Outcomes
A few notable results from the negotiations reflected in Annex I:
- European Union — 15% rate. For EU-origin goods currently subject to a column 1 duty below 15%, additional duties will bring the effective rate to 15% total. For goods already at or above 15%, no further reciprocal tariff applies.
- Japan — 15%, following a framework agreement involving commitments to buy or invest in the U.S.
- South Korea — 15%, same framework as Japan.
- United Kingdom — 10%, consistent with the U.S.-U.K. Economic Prosperity Deal announced earlier in the year.
- Vietnam — 20%, down from the 46% originally announced on April 2, following a framework agreement.
- Indonesia — 19%, reduced from 32%, with Indonesia agreeing to drop tariffs on U.S. goods to zero.
- Philippines — 19%, reduced from 20%, also agreeing to zero tariffs on U.S. goods.
- India — 25% reciprocal tariff, plus an additional 25% tariff announced separately for India’s purchases of Russian oil, bringing the effective total for many Indian imports to 50% effective August 27.
- Brazil — 50% on most goods, one of the highest rates in the order.
- Laos, Myanmar — among the highest rates in Annex I, at 40%+.
Canada, Mexico, and China Are Not in This Order
Canada, Mexico, and China remain on separate tracks and are not addressed in Annex I. Each has its own executive order framework:
- Canada — Concurrent with signing this order, Trump signed a separate executive order increasing Canada’s tariff rate from 25% to 35%, effective August 1. USMCA-qualifying goods remain exempt.
- Mexico — A 90-day pause on additional tariffs was announced July 31, leaving Mexican imports at 25% for non-USMCA goods, with negotiations continuing.
- China — The current 10% reciprocal tariff rate on China (down from the elevated levels during the April escalation) was set to revert on August 12. The order explicitly preserves the separate China framework established by Executive Order 14298 of May 12, 2025, and does not disturb it.
The Transshipment Tariff: A New Enforcement Tool
One notable new element in this order is what the administration is calling a “transshipment tariff.” The order provides that any good determined to have been transshipped through another country specifically to evade the reciprocal tariffs — to take advantage of a lower-rate country’s Annex I rate — will be subject to a 40% duty. This is separate from, and in addition to, CBP’s existing authority to impose penalties for tariff evasion under the customs laws. The order also directs CBP to publish a list every six months of countries and specific facilities being used in circumvention schemes.
This transshipment provision is worth paying attention to. CBP enforcement of origin rules and transshipment evasion has been a growing priority for several years, and the explicit tariff consequence — on top of existing penalty exposure — signals that this administration intends to treat it as a front-line enforcement issue rather than a back-office compliance matter.
Existing Exemptions Remain in Place
The order preserves the exemptions established in Annex II of the original April 2 executive order, including exemptions for goods already subject to Section 232 steel and aluminum tariffs, certain semiconductors, pharmaceuticals (for now), copper, lumber, energy products, and informational materials. The semiconductor exemption from the April 11 presidential memorandum also appears to carry over. If your goods were exempt from the reciprocal tariffs before August 7, they should remain exempt under this order — but given the pace of changes, it is worth verifying.
The IEEPA Legal Cloud
Like the tariffs that preceded it, this order is issued under the International Emergency Economic Powers Act (IEEPA). Courts have been skeptical. The Court of International Trade found in June that IEEPA does not authorize tariffs; a Washington D.C. district court reached the same conclusion in a separate case. Both rulings have been stayed pending appeal, so the tariffs remain in effect for now. The Supreme Court denied expedited review in June, meaning a final decision is unlikely before late 2025 or 2026 at the earliest. The July 31 order includes a severability clause — a signal that the administration anticipated legal challenges and is trying to preserve what it can if the courts ultimately limit IEEPA tariff authority.
The practical takeaway: pay the tariffs as assessed, but document your entries carefully. If IEEPA tariffs are ultimately vacated, the ability to claim refunds will depend on whether importers can demonstrate what they paid and when.
Reciprocal Tariff Questions?
Do you have questions about reciprocal tariffs and how the August 7 rates affect your imports? Great Lakes Customs Law has been advising importers for more than 15 years. Call us at (734) 855-4999, send a text message, or reach us on WhatsApp.