Trump just revealed his new tariff plan. Here’s what you need to know

President Donald Trump just set new tariffs for every country around the world, solidifying his extreme break with America’s long-standing trade policy.

Tariffs on the vast majority of goods America imports are set to rise – even from the handful of countries that negotiated individual trade deals. The higher tariffs continue Trump’s reversal of the decades of globalization that made America’s massive services economy the envy of the world – but contributed to its long decline in manufacturing.

With just a few hours to go before its self-imposed August 1 trade deadline, the White House provided key details about its new trade policy late Thursday – and, along with it, its new tariff plan.

Here’s what to know about the latest set of tariffs:

The White House announced Thursday that the “universal” tariff for goods coming into the United States will remain at 10%, the same level that was implemented on April 2.

But that 10% rate will apply only to countries with which the US has a trade surplus – countries to which the United States exports more than it imports. That applies to most countries, a senior administration official said.

A 15% rate will serve as the new tariff floor for countries with which the United States has a trade deficit. About 40 countries will pay that new 15% tariff. That tariff will be lower for many of those nations than the April 2 “reciprocal” tariffs, but it will be higher for a handful.

And more than a dozen countries have tariff rates that are higher than 15%, either because they agreed to a trade framework with the United States or because Trump sent their leaders a letter dictating a higher tariff. The senior administration official said those countries have among the highest trade deficits with the United States.

The White House identified 26 countries whose goods will be subjected to US tariffs greater than 15%. A senior administration official claimed these countries have excessive trade deficits with the United States.

In addition, Mexico and Canada will continue to face higher tariffs for goods that are not exempt under the US-Mexico-Canada free-trade agreement. Mexico on Thursday agreed to a 90-day continuation of the current 25% tariff rate the US currently places on those items. Non-exempt Canadian goods imported to the United States will face a 35% as of Friday at 12:01 am ET – up from a 25% tariff previously.

The new tariff regime will not go into effect Friday, as had been expected.

Instead, the tariffs will be implemented on August 7 to give Customs and Border Protection sufficient time to make the necessary changes to collect the new duties.

Canada’s tariffs are an exception – those will go into effect Friday.

The only major trading partners that didn’t see tariff rates change on Friday were the United Kingdom, China and Mexico. Trump signed a trade framework with the UK and China. However, the deal signed with China expires in less than two weeks, which means those tariffs could soon increase.

With Mexico, Trump had threatened to raise tariffs to 30% at 12:01 am. But after a conversation with Mexico’s president, Claudia Sheinbaum, on Thursday, he extended Mexico’s previous tariff rate for another 90 days.

Over the past month, Trump announced a handful of other trade agreements. It’s unclear whether they’ll be finalized, but it appears those countries might have avoided rates above what’s in their deals.

For instance, goods from the European Union were set to face 30% tariffs. The agreement reached over the weekend, however, calls for 15% tariffs for most goods. That’s the same rate goods from South Korea and Japan will be taxed at.

That’s still higher than the 10% rate goods have been tariffed at since April, though.

That’s a question actively being debated. Trump has cited the International Emergency Economic Powers Act to impose country-specific tariffs.

In May, the Court of International Trade found Trump overreached his legal authority doing so. Oral arguments for the administration’s appeal kicked off Thursday, and a panel of judges appeared skeptical that Trump had the power to levy tariffs using those emergency powers.

Of particular issue was the unprecedented use of the IEEPA to levy tariffs, especially because the law makes no mention of tariffs to begin with.

Several judges also questioned Trump’s rationale behind declaring an economic emergency. The president has previously stated that US trade deficits with other countries, that is, when the US imports more than it exports, merit a national economic emergency requiring tariffs to correct.

Judge Raymond Chen, however, questioned: “Can the trade deficit be a extraordinary and unusual threat when we had trade deficits for decades?”

It may take weeks, or even months, before the appeals court reaches a verdict. After that, it could still be challenged before the Supreme Court. Regardless of the ultimate outcome, Trump has plenty of levers to pull to roll out new tariffs and keep many in place.

Technically, he did. New tariff rates were set to go into effect Friday – and they will now mostly go into effect August 7.

The president has given no indication he’ll pause these tariffs any further, though.

However, he’s said that about past tariff deadlines only to extend them later on. In short, everything, including the tariff rates that just went in place, is subject to change at the publishing of a Truth Social post.

The tariff changes evoke Trump’s “Liberation Day” in April, when he similarly hiked import taxes across the board. The move threw financial markets into chaos and stoked fears of a global recession.

Trump ultimately delayed the “reciprocal” April tariffs hours after they took effect, later setting August 1 as the new deadline for trade agreements on pain of higher tariff rates. The president told some countries what rates they would face on that day absent new agreements but appeared to leave other nations in the dark.

Inflation has stayed relatively tame through Trump’s earlier tariff rounds, but that could change as higher rates kick in. Already, companies including Procter and Gamble and Walmart have said tariff-related price increases are underway.