President Donald Trump recently signed a sweeping executive order, initiating new tariffs on a broad spectrum of U.S. trading partners that are set to take effect on August 7th. This significant move marks a pivotal next step in his administration’s trade agenda, poised to test the resilience of the global economy and the stability of established American alliances.
The order outlines tariff rates for 68 countries and the 27-member European Union, with a standard 10% rate applied to nations not specifically listed. According to a senior administration official, who briefed reporters anonymously, these rates were determined based on existing trade imbalances with the United States and the regional economic profiles of the affected countries.
This directive followed closely on the heels of White House announcements regarding various trade agreements reached with nations and blocs, just prior to a self-imposed deadline. The implementation of these trade tariffs will be staggered to allow for the harmonization of rate schedules, a strategic approach intended to streamline the complex process.
Notably, Trump Administration officials earlier indicated a 90-day negotiating period with Mexico, one of the largest U.S. trading partners, during which a 25% tariff rate will remain in place—a reduction from the previously threatened 30%. Mexican President Claudia Sheinbaum expressed optimism on social media, highlighting the avoidance of an announced tariff increase and the opportunity for dialogue toward a long-term agreement.
Conversely, relations with Canada appeared less clear, with President Trump noting a call from Prime Minister Mark Carney ahead of potential 35% tariffs on Canadian goods, yet stating no direct communication had occurred on the day of the order. This echoes previous “reciprocal” tariff announcements that sparked stock market panic and recession fears, prompting earlier negotiating periods that often culminated in hasty, rate-listing agreements.
International reactions varied, with the EU Commission spokesperson Olof Gill remarking that while the U.S. has made commitments, the onus is on them for implementation, implying the document might not be legally binding. Furthermore, the agreement with Mexico reportedly maintains the 25% tariff on imported goods, which President Trump has controversially linked to efforts against fentanyl trafficking.
Domestically, the executive order faces considerable legal scrutiny. An 11-judge panel of the U.S. Court of Appeals for the Federal Circuit in Washington displayed incredulity regarding the administration’s assertion that the president could unilaterally impose tariffs without specific congressional approval. Circuit Judge Jimmie Reyna pointedly noted that the International Emergency Economic Powers Act (IEEPA), cited by the administration, does not even contain the word “tariffs.”
Brett Shumate, the attorney representing the Trump Administration, conceded during the 99-minute hearing that “no president has ever read IEEPA this way” but maintained the legality of the action. This 1977 law, signed by President Jimmy Carter, traditionally grants presidents power to seize assets and block transactions during national emergencies, not necessarily to levy tariffs.
Ultimately, the administration’s arguments regarding broad and flexible presidential powers under IEEPA failed to convince all judicial bodies. A three-judge panel of the U.S. Court of International Trade, a specialized federal court in New York, had already ruled in May that President Trump had exceeded his constitutional powers in similar tariff impositions, underscoring the complex legal landscape of his international trade policy.
