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In a dramatic escalation of his trade strategy, U.S. President Donald Trump signed a new executive order on Thursday revising tariff rates on dozens of countries — including a steep 40% duty on transshipped goods and up to 41% for some nations — just ahead of the long-threatened August 1 deadline.

The decision, which marks one of the most aggressive tariff overhauls in recent history, will take effect from August 7, according to an official White House statement to CNBC-TV18. The updated directive modifies the “reciprocal” tariffs first announced in April, targeting countries that have failed to reach new trade or security agreements with Washington.

While some U.S. partners secured partial relief through recent negotiations, most countries not listed in the updated executive order will now face an automatic 10% duty on all exports to the U.S.

40% Tariff on Transshipped Goods: A New Enforcement Frontier

A key provision in the order is a blanket 40% tariff on all goods transshipped through third countries to bypass existing U.S. trade restrictions. This move is widely seen as aimed at curbing indirect exports from China and other major exporters trying to reroute products through neighboring states.

“This should not be read as an extension, but rather a window to allow Customs and Border Protection to prepare for enforcement,” said a White House official.

Former U.S. trade negotiator Stephen Olson commented that this is just the beginning:

“Don’t assume this is the end of the story. More deals and further tariff increases are almost certain to follow.”

Countries Facing the Highest Tariffs

Some countries saw an increase in tariff rates as high as 41%, with Syria topping the list. Other notable increases include:

• Laos and Myanmar – 40%
• Switzerland – 39%
• South Africa – 30%
• Canada – Now facing 35%, up from 25%, except for goods covered under the USMCA pact

Trump’s administration clarified that the revised rates apply only to goods not exempted through active trade agreements or bilateral pacts.

Partial Relief for Select Asian Economies

While several countries saw hikes, others managed to secure favorable revisions in their tariff rates:

• Thailand: Reduced to 19%, down from 36%
• Malaysia: Lowered to 19% from 24%
• Taiwan: Cut to 20%, from 32% earlier

For these countries, continued negotiations and alignment with U.S. trade and security objectives played a significant role in achieving more manageable rates.

Executive Order: A Shift from Negotiation to Enforcement

The executive order also acknowledged ongoing negotiations with key U.S. trading partners such as the European Union, Japan, South Korea, Philippines, and Indonesia — many of which are now subject to provisional tariff rates until deals are finalized.

Wendy Cutler, former Deputy U.S. Trade Representative and current VP at the Asia Society Policy Institute, noted a critical omission:

“What’s missing from the executive order is clarity on new or existing rules of origin, which is especially relevant now with the 40% transshipment tariff in place.”

Fallout in Global Markets and Reaction from Analysts

The announcement rattled financial markets across Asia:

• South Korea’s KOSPI fell more than 3%
• Japan’s Nikkei 225 declined by 0.66%
• Australia’s S&P/ASX 200 dropped 0.76%

These declines reflect investor concerns about broader economic fallout and further trade volatility.

Meanwhile, Trump hinted at additional actions, suggesting that a 15% to 20% global tariff rate could be imposed on countries that haven’t signed dedicated trade agreements with the U.S. — a signal that his administration is not done reshaping the global trade landscape.

China’s Position: Watching and Waiting

Although the latest tariff revision does not affect Chinese exports — which remain under an August 12 deadline due to a separate truce — analysts say China is closely monitoring the transshipment clause.

Stephen Olson observed:

“China will correctly view the 40% transshipment penalty as targeting its export networks, even if not named directly.”

While recent trade discussions between Beijing and Washington in Stockholm were described as “positive,” no binding agreement has been reached, leaving the door open for further escalation.

The Bigger Picture: Rules-Based Trade Under Pressure

Critics argue that Trump’s unpredictable approach to tariffs risks undermining multilateral trade rules and global economic cooperation.

“Countries wishing to trade with the U.S. now face dramatically higher tariffs that could be further increased at the whim of a president who shows little regard for rules — even those he signed,” said Olson.

While the order opens new room for negotiation, it also injects fresh uncertainty into trade relationships already strained by inflation, supply chain shocks, and geopolitical tensions.

Looking Ahead: More Tariffs on the Horizon?

Trump’s tariff directive represents a pivot from negotiation to enforcement, setting a precedent for future actions if countries don’t align quickly with U.S. demands.

With the global trade architecture already under strain, this latest move could catalyze a wave of retaliatory tariffs, supply chain realignments, and regional trade diversification — especially in Asia and Europe.

As the August 7 implementation date nears, the world’s exporters are scrambling to understand the fine print and recalibrate their economic strategies in response to what could become the new normal in U.S. trade policy.