Trump Administration Replaces Temporary Tariff with New 10-12.5% Levies

The White House announced that the United States will replace a temporary 10 % tariff imposed earlier this year with a broader set of duties ranging from 10 % to 12.5 % on imports from dozens of countries. The new measures took effect shortly after midnight on Friday and are described by the administration as “more legally durable” than the earlier temporary rate.

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The average tariff rate, now 11 % according to the Budget Lab at Yale University, is projected to add roughly $1,100 in costs per American household. Gasoline prices have risen above $4 per gallon, according to the American Automobile Association, after a brief dip in late June. Mortgage rates on 30-year loans have also climbed to their highest level in nearly a year, further tightening household budgets.

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Economists warn that the renewed tariff regime will deepen uncertainty for firms that rely on imported inputs. Eswar Prasad, a professor at Cornell University, argues that “If there are tariffs imposed and if they stick, that is certainly going to drive up the prices of imports, which is going to add to inflation.” He adds, “It is going to have a dampening effect on business investment.” The Supreme Court’s recent decision striking down many of the administration’s earlier tariffs had offered some relief, but the new, more durable measures could reignite legal challenges and prolong the period of volatility for exporters and importers.

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The administration contends that tariffs generate significant revenue, with the Budget Lab projecting $1.9 trillion in additional federal receipts. Natasha Sarin, president of the Budget Lab, cautions that the efficiency of this revenue is questionable, noting that the gains must be weighed against projected inflationary pressures and slower economic growth. The White House also signals intent to target additional sectors, including pharmaceuticals, and to consider further duties on countries such as Canada.

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Internationally, the tariff expansion adds to concerns already heightened by rising energy costs linked to the U.S. conflict with Iran. The International Monetary Fund has recently lowered its global outlook, citing heightened uncertainty. Continued tariff pressure could keep foreign markets on guard and sustain a “permanent decline” in economic strength, according to analysts.

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