U.S. Delays Increased Country-Specific Tariffs Until August 1

Image
automobiles in parking lot for tariffs story. courtesy of Shutterstock


President Trump's self-imposed July 9 deadline to strike new deals with international trade partners has come and gone with new developments for American businesses to be mindful of, including new tariffs effective starting in August for several countries unless they come to a trade agreement with the United States in July. Here's the latest: 

• Deadline Passes, with Extension. On July 7, the President issued an Executive Order, "EXTENDING THE MODIFICATION OF THE RECIPROCAL TARIFF AGEEEMENTS," which moved the tariff compliance deadline from July 9 to August 1, giving countries additional time to negotiate new reciprocal tariff agreements with the United States or face increased tariffs (currently 10% for most countries).   

  • According to President Trump and Treasury Secretary Scott Bessent, there will be no further extensions for international trading partners.  


• Tariff Letters Issued to 14 countries. President Trump sent letters outlining duties on imported goods with rates ranging from 25% to 40% that will take effect on August 1 unless bilateral agreements are agreed upon. 

  • Targeted countries include Japan, South Korea, Malaysia, Thailand, Indonesia, Bangladesh and others that are integral to the global supply chain for vehicles, electronics, rubber components and aftermarket systems. 


• New Tariff Rates Impact Vehicle and Part Suppliers. Several nations that received tariff letters are top exporters of parts, including: 

  • Japan and South Korea (25%)– key sources of original equipment and aftermarket engine components, transmission systems, sensors and electronics. 
  • Thailand (36%) and Malaysia (25%) – major producers of rubber products, lighting, air conditioning units and moldings. 
  • Indonesia (32%) and Bangladesh (35%) – increasingly involved in manufacturing electrical harnesses, plastic housings, and interior trim. 
  • The application of 25% to 40% tariff rates on imports from these countries could drive up costs on critical parts used throughout the aftermarket, from engine rebuild kits and brake components to wiring systems and infotainment upgrades. 
  • Additional new tariff rates outlined in President Trump's letters include South Africa (30%), Kazakhstan (25%), Laos (40%), Myanmar (40%), Tunisia (25%), Bosnia and Herzegovina (30%), Serbia (35%) and Cambodia (36%). 


• Additional letters outlining new tariff rates issued on July 9.  

  • According to the AP, President Trump issued tariff letters to Libya, Iraq, Algeria and Sri Lanka (30%), Moldova and Brunei (25%), and the Philippines at 20%. He also announced that exports from Brazil would be met with 50% tariffs starting on August 1. 


• Copper Tariff Threat. President Trump has floated the possibility of a 50% tariff on copper, which is essential to automotive wiring, motor windings, EV powertrains and thermal systems. 


• Electronics and Chipsets. The White House has suggested further tariffs may be levied on semiconductors, sensors, and other “strategic electronics.” These components are vital for Advanced Driver Assistance System (ADAS) recalibration tools, engine control units (ECUs), and aftermarket diagnostic systems.  


• Impacted Nations Respond. Japan and South Korea have moved quickly to open new trade talks in hopes of securing exemptions or reduced rates.  

  • Malaysia and Thailand have pushed back, but optimism remains that the two countries will reach an accord ahead of August 1.  
  • The European Union (EU) is racing to finalize a broader agreement that could prevent across-the-board tariffs on components sourced from EU member states. 
  • Australia—a key supplier of copper and lithium—maintains it is seeking clarification on whether new duties could affect exports tied to EV battery components and wiring harnesses or if it’ll remain limited to pharmaceuticals.  

What Comes Next 

Unless significant trade concessions are made, August 1, will mark a new phase of tariff enforcement on imports, including vehicle-related parts and components. The U.S. Trade Representative’s (USTR) office is expected to release further implementation guidance within the next two weeks. 

We will continue to monitor developments closely and provide members with updates and policy briefings as further information becomes available. 

Further Reading 

White House Fact Sheet: President Donald J. Trump Continues Enforcement of Reciprocal Tariffs and Announces New Tariff Rates. 

Questions? Contact Juan Mejia, SEMA's senior manager for federal government affairs, at JuanM@sema.org. 

 

Image courtesy of Shutterstock

Stay Connected

Sign Up For The PRI eNewsletter to get the latest in racing industry news, special events, new product information and more directly to your inbox.

Stay Connected

Sign Up For The PRI eNewsletter to get the latest in racing industry news, special events, new product information and more directly to your inbox.