Many countries benefit when the US imposes an additional 10% import tax

From 0:01 on February 24 (US time), goods from countries imported into the US are subject to an additional tax of 10%, according to the decree signed by President Donald Trump on February 20.

This tax is added to current rates such as the 25% tax rate on steel, aluminum, copper, sawn timber and cars and spare parts (Article 232); Chinese goods (Article 301, many different levels for each item). In addition, there are other basic tax rates according to the harmonized tariff schedule (HTS) and most favored nation (MFN).

Average import tax into the US decreased

According to calculations by Global Trade Alert, effective import tariffs decreased to about 11.6%, compared to 15.3% before the Supreme Court ruled against tariffs under the International Emergency Economic Powers Act (IEEPA).

Effective import tax is the actual average tax that imported goods bear, calculated on the total value of goods, usually lower than the nominal tax rate due to taking advantage of incentives and exemptions.

Although the average import tax into the US has decreased compared to before, experts and managers warn that consumers will hardly feel a significant change.

Economics professor Kyle Handley at the University of California, San Diego said that commodity prices could fall when imported (old taxable) inventories are sold off. However, he noted that this level is not significant, while uncertainty still covers US businesses and trading partners.

Many US trading partners benefit

Data from Global Trade Alert shows that about 90 US trading partners, including 10 major partners, enjoy lower average import tariffs. In particular, countries that once suffered high taxes under IEEPA such as Brazil, China and India will record a significant reduction when applying an additional tax of 10%.

For example, some Brazilian products were once subject to up to 50% tax under IEEPA. But from February 24, the new level that this South American country must bear is only around 10%. Similarly, the average import tax on Chinese goods also decreased from 36.8% to 26.9%.

For India, President Trump once lowered the punitive tax from 50% to 18%. However, the abolition of IEEPA to replace it with an additional 10% rate helps American goods entering the US to now be taxed at less than 14%.

Economics professor Kyle Handley at the University of California, San Diego said that Brazil, India and many Asian countries that have reached a trade agreement with Mr. Trump are “temporary winners.”

Nearly 130 countries and territories did not record changes in tax rates after stopping tax collection under IEEPA. Only more than 10 US partners are subject to higher taxes after applying the additional 10% rate under Article 122, including Australia, Belgium and Portugal. However, the increase is not significant, on average about 0.01-0.07 percentage points.

According to Joe Brusuelas, chief economist at RSM US, in case additional taxes increase to a maximum of 15%, countries including Brazil, Canada, China, India, Indonesia, Mexico and South Africa still enjoy lower tariffs than before the US Supreme Court’s ruling. Only a few countries such as the UK, Italy, Singapore, Argentina, Australia and Saudi Arabia will have to pay more or be significantly affected.

Impact on bilateral agreements

US Trade Representative Jamieson Greer announced that the tariff agreement that the economies negotiated with the Trump administration is still in effect. However, according to experts, the reality is much more complicated because the agreements signed from April 2025 are based on many different commitments and legal bases. Some provisions for reciprocal tax amendments are made under IEEPA, while others rely on Article 232 or investment and procurement commitments.

The Supreme Court’s ruling does not affect provisions outside of IEEPA, so they remain in effect. However, the parts that depend on this law have lost their legal basis, causing the enforcement mechanism to no longer exist.

For example, with the US-Swiss trade agreement, the tax floor on imports from Switzerland is applied under IEEPA. When this tax was abolished, the legal tools to maintain the floor also did not exist.

The same goes for tax abatement agreements. For example, the US once agreed to lower tariffs on Indian goods from 25% to 18%. But when the base tax rate of 25% (according to IEEPA) was rejected by the court, the agreement to reduce it to 18% was no longer valid.

Ms. Deepali Bhargava, Head of Asia-Pacific research team at investment bank ING (Netherlands), said that the US Supreme Court’s ruling significantly improves India’s negotiating position. “When the threat from IEEPA is eliminated, the country has more room to reconsider elements of the agreement with the US, which previously may have been difficult to accept,” she said.

Therefore, to properly and fully implement the signed agreements, the Trump administration must initiate a number of other procedures to apply the Article 122 framework or renegotiate based on a new legal basis.

On February 23, the European Parliament (EP) postponed the vote on the trade agreement with the US. The EP plans to meet again on March 4 to assess whether the US has provided clear information about the current situation and whether it is committed to complying with the agreement the two sides reached last year.

Long-term tariff ‘chess game’

Unlike the tax under IEEPA, which has no specific deadline, the additional tax (maximum 15%) under Article 122 will expire after 150 days. After that, the National Assembly must approve if it wants to extend.

Analysts say that although tariffs on the US are reduced in the short term, the Trump administration’s protectionist stance remains unchanged. The White House turned to stronger legal tools such as Articles 232 and 301.

In fact, in addition to current tariffs, the US is expanding investigations under Article 232 into robots, wind turbines, drones and pharmaceuticals. Investigations under Article 301 on digital trade with Brazil, or digital services tax targeting Canada, France, Austria, Italy, Spain, Turkey and the UK continue.

Last week, Mr. Jamieson Greer also mentioned that the Trump administration may launch a number of new investigations under Article 301. These investigations are expected to target most major trading partners, revolving around many issues such as overcapacity, US technology discrimination and digital services tax. The Trump administration expects them to be carried out on a “stripped schedule”.

On February 23, President Trump warned partners not to withdraw from any previously negotiated trade agreements with the US, and threatened to impose much higher tariffs under another legal tool.

Japan also asked the US to ensure the new tariff regime would be as favorable as the existing agreement. Britain and Taiwan (China) expressed their desire to maintain the agreed bilateral agreement.

Meanwhile, China called on Washington to abandon “unilateral tariffs”. The Ministry of Commerce of this country said it is ready to hold a new round of trade negotiations with the US.