The United States has finalized trade agreements with five countries, Japan, the Philippines, the United Kingdom, Vietnam, and Indonesia, just ahead of an August 1 deadline set by President Donald Trump to avoid steep punitive tariffs.
The new deals lock in tariff rates significantly higher than previous levels but lower than the harsher rates threatened by the Trump administration. Analysts at Barclays note a “trend of tariff rates gravitating towards the 15–20 percent range,” while Moody’s warns the new rates still represent a substantial increase from the pre-Trump era.
Japan: 15% Tariff on Autos
Japan struck what Trump called a “massive” deal, avoiding a 25% tariff on its vital auto exports by securing a 15% rate instead. However, existing 50% tariffs on steel and aluminum remain in place. In return, Japan will invest $550 billion in the US and open its markets to American cars, trucks, rice, and other agricultural products. Analysts have cautioned that Japan made significant concessions, setting a tough precedent for upcoming EU negotiations.
Philippines: 19% Tariff
The Philippines reached an agreement that slightly lowers US tariffs on its high-tech and apparel exports to 19%, down from a threatened 20%. Though a modest reduction, it allows Manila to avoid harsher trade penalties.
United Kingdom: 10% Average Tariff
In a deal finalized in May, Washington reduced car tariffs for the UK from 27.5% to 10% for the first 100,000 vehicles annually, a major victory for Jaguar Land Rover. British aerospace firms also won exemptions, but London had to grant increased access for US ethanol and beef. Talks on steel and aluminum tariffs are still ongoing.
Vietnam: 20% Tariff with Exceptions
Vietnam secured a deal early this month that imposes a 20% tariff on its goods — far below the threatened 46%. However, goods rerouted through Vietnam to avoid tariffs will face a 40% levy. In a reciprocal move, US products will enter Vietnam tariff-free.
Indonesia: 19% Tariff and US Gains
Indonesia finalized a deal last week that caps tariffs on its goods at 19%, down from a proposed 32%. Certain essential goods may see lower rates. In exchange, Jakarta will eliminate data flow taxes, ease mineral export restrictions, and recognize US standards for car and pharmaceutical imports. Indonesia also pledged to buy more US agricultural products and oil.
While these deals defuse immediate trade tensions, analysts stress that many of the agreements remain partial, with significant negotiations still to come.
Written By Rodney Mbua
