Trump’s Novel Tariffs: A Global Shake-Up for Trade
Starting February 24th, 2026, a sweeping 10% tariff will be applied to nearly all imports entering the United States, a move announced by the White House. This policy impacts global trade, even for nations with existing trade agreements with the US, including the UK, India, and the European Union.
Existing Trade Deals Not Immune
Despite previously negotiated trade deals, countries like the UK, India, and the EU will not be exempt from the new 10% tariff. A White House official clarified that these nations will fall under Section 122 of the tariff implementation, overriding the preferential rates established in their agreements. The administration expects these countries to continue adhering to the concessions made within those original deals.
Strategic Exemptions: What Goods Are Spared?
Even as broad in scope, the tariff isn’t universally applied. Certain goods are exempt, categorized as essential for the US economy. These include critical minerals, metals, energy products, natural resources, food crops, pharmaceuticals, electronics, cars, trucks, and aerospace products. Informational materials like books, donations, and accompanied baggage are also excluded.
The exemptions are broadly defined, leaving room for interpretation regarding specific items. However, goods covered under the USMCA agreement (US, Mexico, and Canada) remain duty-free, a benefit Prime Minister Mark Carney has previously highlighted. Similarly, textiles and apparel from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua will continue to enter the US without tariffs under the Dominican Republic-Central America Free Trade Agreement.
A Return to Pre-Exemption Tariffs
The Trump administration is also reversing a previous policy by reinstating tariffs on low-cost goods. Last year, the de minimis exemption – which allowed goods valued at $800 or less to enter the US without tariffs – was eliminated. This change significantly impacts smaller businesses and consumers who previously benefited from duty-free imports.
The India-EU Deal in the Crosshairs
The timing of these tariffs comes shortly after the EU and India announced a landmark trade deal, described as the “mother of all deals.” This agreement, aiming to deepen ties amid tensions with the US, will now be subject to the 10% tariff, potentially impacting its effectiveness. The EU-India deal included significant tariff cuts, notably reducing duties on motor vehicles imported into India to 10% under a quota of 250,000 vehicles – a substantial increase from the 37,000-unit quota granted to the UK in a similar deal last July.
US-UK Trade Deal Under Pressure
The US-UK trade deal, announced in May 2025, also faces the impact of the new tariffs. While the deal aimed to provide American companies with unprecedented access to UK markets, the 10% tariff could offset some of those benefits. The US-UK agreement focused on expanding market access for US agricultural exports, including beef and ethanol.
FAQ
Q: Will the UK trade deal completely protect UK goods from the new tariffs?
A: No, the UK trade deal will not fully protect UK goods. The White House has stated that countries with existing trade deals will still be subject to the 10% global tariff under Section 122.
Q: What types of goods are exempt from the new tariffs?
A: Exemptions include critical minerals, metals, energy products, food crops, pharmaceuticals, electronics, cars, trucks, aerospace products, books, donations, and accompanied baggage.
Q: What is the USMCA and how does it relate to the new tariffs?
A: USMCA is the trade agreement between the US, Mexico, and Canada. Goods covered under USMCA are exempt from the new tariffs.
Q: What happened to the de minimis exemption?
A: The de minimis exemption, which allowed goods valued at $800 or less to enter the US without tariffs, has been eliminated.
Did you understand? The new tariff applies to “almost all imports” meaning there is still some ambiguity about specific product classifications.
Pro Tip: Businesses importing goods into the US should carefully review the White House fact sheet and consult with trade experts to determine how the new tariffs will impact their operations.
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