The Latest: As Trump's sweeping new tariffs take effect, US trading partners scramble worldwide

Key Points

• The U.S. has implemented significant tariffs on imports from over 60 countries, with rates starting at 10% and going as high as 20% for certain countries.
• President Trump believes these tariffs will encourage companies to invest more in the U.S. economy despite recent data showing economic slowdown following the initial rollout.
• Prime Minister Modi stated that India will prioritize farmer interests in ongoing trade negotiations with the U.S., amid pressures for greater access to agricultural markets.
• Sony reported a 23% increase in profits, raising its annual profit forecast and indicating that the impact of U.S. tariffs was less severe than initially anticipated.

President Donald Trump’s latest round of punishing new taxes on imports arrived Thursday — with dozens of countries now facing even higher tariffs on goods that their businesses send to the U.S.

It’s been nearly 100 years since the nation had an overall import tax rate as high as the one set Thursday. Starting just after midnight, products from more than 60 countries and the European Union would face tariff rates of 10% or higher. Goods from the European Union, Japan and South Korea will be taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh will be levied at 20%.

The Trump White House is confident that the onset of his broad tariffs will ramp up new investments and jump-start hiring in ways that can rebalance America as a manufacturing power. But there are already warnings signs of self-inflicted wounds to the U.S. economy — as companies and consumers feel the impact of higher prices from current levies, and brace for more. Beyond the latest country-specific tariffs to go into effect, Trump on Wednesday announced plans for a steep 100% tariff on non-U.S. computer chips, stoking more confusion among businesses worldwide.

Here's the latest:

Wall Street drifts to a mixed finish, with muted effect from tariffs

U.S. stocks drifted to a mixed finish on Thursday, as Trump’s new tariffs on dozens of countries had only a muted effect on markets worldwide.

The S&P 500 slipped 0.1% Thursday. The Dow Jones Industrial Average dipped 0.5%, and the Nasdaq composite rose 0.3%.

Worries are high that Trump’s tariffs are damaging the economy, particularly after last week’s worse-than-expected report on the job market. But hopes for coming cuts to interest rates by the Federal Reserve and a torrent of stronger-than-expected profit reports from big U.S. companies are helping to offset the concerns, at least for now.

Questions remain around Trump’s plans for a 100% tariff on computer chips

The U.S. imports a relatively small number of computer chips because most foreign-made chips in a device — from an iPhone to a car — were already assembled into a product, or part of a product, before it landed in the country.

But a key question the industry is asking is “whether there will be a component tariff, where the chips in a device would require some sort of separate tariff calculation,” said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics.

Regardless, Wall Street investors interpreted Trump’s planned tariff as good news not just for U.S. companies like Intel and Nvidia, but also for the biggest Asian chipmakers like Samsung and Taiwan Semiconductor Manufacturing Company that have been working to build U.S. factories. But in contrast, it left greater uncertainty for smaller chipmakers in Europe and Asia that have little exposure to the artificial intelligence boom but still make semiconductors inserted into essential products like cars or washing machines.

These producers “probably aren’t large enough to get on the map for an exemption and quite probably wouldn’t have the kind of excess capital and margins to be able to add investment at a large scale into the United States,” Chorzempa said.

Ralph Lauren warns that tariffs could hurt shopper sentiment

Shares of Ralph Lauren fell more than 7% on Thursday as the maker of iconic polo shirts, sport coats and other luxury clothing said that tariffs and general uncertainty could affect consumer sentiment later this year.

“The big unknown sitting here today is the price sensitivity and how the consumer reacts to the broader pricing environment and how sensitive that consumer is,” Ralph Lauren’s CEO Patrice Louvet told analysts on Thursday. “That’s what we’re watching very closely as we head into the second half.”

The comments came after the clothing maker posted strong sales in its fiscal first quarter — and upgraded its sales outlook. In May, the New York-based company had said that it would raise prices this fall because of tariffs.

Brazil president and India prime minister call to discuss tariffs

Brazil’s President Luiz Inácio Lula da Silva spoke with Indian Prime Minister Narendra Modi on Thursday about unilateral U.S. tariffs, according to a statement from Brazil’s presidency.

The call came as new tariffs imposed by Trump took effect. On Wednesday, Trump said he would be adding a 25% tariff on Indian imports tied to Russian oil starting in 21 days, raising the total to 50%. A similar rate was applied to Brazilian exports last week, which went into effect on Wednesday — though exemptions included aircraft parts, aluminum, tin and wood pulp.

Lula and Modi reaffirmed their goal to boost bilateral trade to more than $20 billion by 2030 and agreed to expand the MERCOSUR-India trade agreement. Lula confirmed plans to visit India in early 2026, with Vice President Geraldo Alckmin visiting in October.

Americans will see an average tax of 18.6% for imported goods, Yale's Budget Lab says

As Trump’s tariffs take effect, Americans will see an average tax of 18.6% for imported products, the highest rate since 1933, according to the Budget Lab at Yale, a non-partisan policy research center.

The Budget Lab estimated prices will increase 1.8% in the short term as a result of the trade war the U.S. waged this year. That’s the equivalent of a $2,400 loss of income per U.S. household, the group said.

The analysis, which is based on the effects of all U.S. tariffs and foreign retaliation implemented in 2025 and through Wednesday, including the 50% tariff rate on India. The analysis assumes the Federal Reserve doesn’t react to tariffs and so the real income adjustment comes primarily through prices rather than nominal incomes. If the Federal Reserve reacted, the adjustment could in part come in the form of lower nominal incomes, the group said.

US trade group warns of ongoing uncertainty for retail businesses

The National Retail Federation, the largest retail trade group in the U.S., is continuing to point to uncertainty facing businesses across the country.

Jon Gold, vice president of supply chain and customs policy for The National Retail Federation, said that while increased U.S. tariffs take effect for dozens of countries, there are still some ongoing negotiations and discrepancies about the deals that have been reached, leading to “continued uncertainty” around the final rates. He also pointed to concerns about the impact of the different sectoral tariffs being considered and potential secondary tariffs over Russian oil.

“Retailers have been able to hold the line on pricing so far, but the new increased tariffs will significantly raise costs for U.S. retailers, manufacturers and consumers,” Gold said in an emailed statement to The Associated Press. “While we support better trade deals, we need to negotiate clear and binding agreements that all parties will adhere to.”

Beauty brand e.l.f. raises the prices of all of its products by $1 each, citing tariffs

Cosmetics company e.l.f. Beauty, which makes a majority of its products in China, said on Wednesday said that it raised prices by one dollar on its entire product assortment as of Aug. 1 because of tariff costs. That marks the third price hike in its 21-year history.

E.l.f. Beauty CEO Tarang Amin noted that its average selling price is now $6.50, but that that’s still lower compared to nearly $9.50 for other well-established mass cosmetic brands and over $20 for upscale brands.

“I think we’re just in that environment right now with the uncertainty of tariffs and the tariff impact that you will probably see more companies take pricing,” Amin told analysts on an earnings call Wednesday. “We tend to lead, and then we will see how many more will follow us.”

E.l.f.’s CFO Mandy Fields told analysts that the company is not sure whether the $1 price increases will be enough to absorb the tariff costs and will monitor what will happen on Aug. 12, when further negotiations between the U.S. and China are planned.

“I think we’re just going to have to wait and see how things play out there,” she said.

Alcohol trade groups ask for ‘toasts not tariffs’

A coalition of 57 U.S. associations and state guilds that represent businesses that make, import, distribute and sell alcohol, called the “Toasts not Tariffs Coalition,” asked Trump for reciprocal, tariff-free trade for U.S. and European Union spirits and wines.

The group estimates that the 15% tariff on EU wine and spirits could result in more than 25,000 American job losses and nearly $2 billion in lost sales.

“Many U.S. and EU spirits are recognized as ‘distinctive products’ and can only be made in their designated countries—Bourbon and Tennessee Whiskey in the U.S., and Cognac in France,” the group wrote. “Similarly, wine is linked to its place of origin through American Viticultural Areas, appellations of origin or geographical indications. Consequently, production of these products cannot simply be relocated to circumvent tariffs.”

Switzerland says three-fifths of its US exports will face Trump’s steep 39% tariffs

Roughly three-fifths of Swiss exports to the U.S. will face steep 39% tariffs that took effect on Thursday, according to Switzerland’s government — with exceptions granted for key industries like pharmaceuticals, gold and chemicals.

Authorities responded to the whopping customs duties by laying out some workplace protections to impacted employees in Switzerland and vowing to continue talks.

After returning from Washington in a failed last-ditch effort to get the administration to back off the high tariff levels, President Karin Keller-Sutter lamented an “extremely difficult situation” for the most affected sectors and their employees. In a briefing with reporters on Thursday, she said Switzerland wanted a “regulated relationship” with the U.S., which she called a crucial trading partner, “but not at any price.” She said that any final decision would rest with Trump.

Vice President Guy Parmelin added that the hardest-hit sectors would be watchmaking, machinery, medical equipment, as well as food and drinks like coffee, chocolate, cheese and energy drinks.

“The tariffs against our country put us in an unfavorable position compared to our main economic rivals, like the United Kingdom which is at 10% and Japan and the European Union which are at 15%,” he said.

‘No hire/no fire’ trend persists in the US labor market

The number of Americans filing for jobless benefits rose modestly last week, a sign that employers still retaining workers despite economic uncertainty related to U.S. trade policy.

Jobless claims for the week ending Aug. 2 rose by 7,000 to 226,000, the Labor Department reported Thursday, slightly more than the 219,000 new applications that economists had forecast.

Weekly applications for jobless benefits are seen as a proxy for U.S. layoffs. The latest figure remains at a healthy level — with weekly jobless claims mostly settling in a range between 200,000 and 250,000 in recent years since COVID-19 throttled the economy in the spring of 2020.

It was just the second time in eight weeks that jobless benefit applications rose. Still, while layoffs remain low by historical standards, there has been noticeable deterioration in the labor market this year. The report is the first government labor market data release since Friday’s grim July jobs report sent financial markets spiraling downward, spurring Trump to fire the head of the agency that tallies the monthly jobs numbers.

“The ‘no hire/no fire’ theme in the labor market remains firmly intact,” analysts for Jeffries wrote in a note to clients.

Tariff rate confusion in Japan

Japan’s Prime Minister Shigeru Ishiba told reporters that his country is asking the U.S. government to immediately correct tariffs that are not consistent with their agreement that says no additional tariff is added to items whose tariffs exceed 15%, and that tariffs for other items will be capped at 15%.

Ishiba said Japan’s top tariff negotiator, Ryosei Akazawa, double-checked details of the agreement between Japan and the U.S. and that the negotiator is now asking the Americans to take immediate steps to correct discrepancies in the presidential order.

Ishiba’s comments come after conflicting messages from top officials.

Chief Cabinet Secretary Yoshimasa Hayashi said earlier there was no discrepancy between Japan and the U.S. about the understanding of the new tariff deal. But later, the ruling Liberal Democratic Party’s policy affairs chief said the 15% tariff is added on top of existing rates.

China’s exports and imports picked up in July, helped by tariff pause

China’s exports surged 7.2% in July from a year earlier while its imports grew at the fastest pace in a year, as businesses rushed to take advantage of a truce in Trump’s trade war with Beijing.

But analysts said the improvement also reflected a low base for comparison in July 2024. And exports to the United States sank nearly 22% year-on-year, while imports from America fell almost 19%. Meanwhile, exports to Africa and Southeast Asia surged at double-digit rates as Chinese businesses diverted sales to other markets.

Tariffs on Chinese goods are being considered separately from the new higher tariffs that took effect on Thursday for dozens of U.S. trading partners. U.S. imports from China are subject to tariffs of at least 30%, with some products facing much higher import duties. The two sides traded a series of sky-high levies earlier this year, but agreed to pause those to allow time for trade talks. It’s unclear if the truce will be extended beyond the current Aug. 12 deadline.

South Africa’s leader says he spoke with Trump

South Africa’s leader said he spoke with Trump as some African nations hope they can still negotiate tariff rates that threaten to increase unemployment in countries already struggling with high rates of joblessness.

President Cyril Ramaphosa’s office said he and Trump spoke Wednesday ahead of steep 30% tariffs coming into effect on some South African exports to the U.S. on Thursday.

The statement said the two leaders “undertook to continue with further engagements.” South Africa has said it believes it can still negotiate with the U.S., even after Trump has been especially critical of the country.

The Trump administration said it has stopped aid and assistance to Africa’s most diverse economy over what it calls its anti-white and anti-American policies.

South African neighbors Botswana and Lesotho have also said they still hope to negotiate better tariff rates.

Lesotho, a tiny mountainous country, was threatened with a huge 50% tariff rate before it was reduced to 15%. It says that is still high enough to threaten thousands of jobs and businesses in its crucial clothing sector, which makes and exports well-known brands like Levi’s and others to the American market.

Swiss tech firms condemn ‘horror scenario’

A leading association of tech companies in Switzerland is decrying a “horror scenario” from 39% U.S. tariffs on Swiss goods that took effect Thursday, lamenting how a “strong commitment” from the Swiss government failed to get the Trump administration to back off.

The association, Swissmem, says tens of thousands of jobs in the wealthy Alpine country are at risk from such high tariffs and the knock-on effect could impact the tourism, healthcare and infrastructure sectors.

“If this horrendous tariff burden persists, the Swiss tech industry’s export business to the U.S. will effectively be dead — especially given the significantly lower tariffs for competitors from the EU and Japan,” Swissmem said in a statement Thursday.

That alluded to 15% tariff rates that the U.S. has set on goods from the European Union and Japan, which would put Swiss tech products at a price disadvantage in the United States.

Swissmem President Martin Hirzel called on the Swiss government to continue to reach out to the U.S. administration, “because the winds in Washington can change at any time.”

South Korea braces for uncertainty despite deal with US

South Korea’s trade minister warned Thursday of continued trade uncertainty despite a last-minute tariff deal with the Trump administration, calling for swift support for vulnerable sectors and long-term efforts to diversify trade networks and enhance the competitiveness of key industries.

During a meeting with business leaders and trade experts, Hankoo Yeo said South Korea must reset its trade strategy to address the global rise in protectionism, which he called the “new normal,” as participants discussed follow-up measures to last week’s trade deal with the United States, his ministry said.

Under the deal, Washington agreed to cut its reciprocal tariff on South Korea to 15% from the initially proposed 25% and to apply the same reduced rate to South Korean cars, the country’s top export to the United States.

South Korea also agreed to purchase $100 billion in U.S. energy resources and commit $350 billion to U.S. investments, though the two countries have offered differing interpretations of how the investment fund would be structured and managed.

In a separate radio interview, Yeo insisted that South Korea’s major chipmakers — Samsung Electronics and SK Hynix — would be unaffected by the 100% tariffs that Trump has vowed to eventually impose on semiconductor imports. Yeo said Washington, under the recent tariff deal, agreed to designate Seoul as one of its most favored trade partners, shielding it from such rates.

Toyota profit takes a dive

Toyota’s profit plunged 37% in the April-June quarter, the company said Thursday, cutting its full year earnings forecasts largely because of Trump’s tariffs.

The Japanese automaker said it based its report on the assumption that Trump’s tariffs on exports from Japan, including autos, would be 12.5% starting this month. As of now they stand at 15%.

Toyota said the tariffs cost its quarterly operating profit 450 billion yen ($3 billion). Cost reduction efforts and the negative impact of an unfavorable exchange rate also hurt its bottom line.

Tariffs to affect more than half of Indian exports to the US

A top body of Indian exporters said Thursday that the latest U.S. tariffs will impact nearly 55% of the country’s outbound shipments to America and lead to exporters losing long-standing clients.

“Absorbing this sudden cost escalation is simply not viable. Margins are already thin,” S.C. Ralhan, president of the Federation of Indian Export Organisations, said in a statement.

The tariffs effectively impose a cost burden, placing Indian exporters at a competitive disadvantage with countries that have lesser import taxes, he added.

In 2024, the U.S. ran a $45.8 billion trade deficit in goods with India, meaning America imported more from India than it exported, according to the U.S. Census Bureau. American consumers and businesses buy pharmaceutical drugs, precious stones, and textiles and apparel from India, among other goods.

Modi vows to defend farmers' interests

Prime Minister Narendra Modi on Thursday said that India will never compromise the interests of farmers.

“For us, the interests of farmers are a top priority. I know I will have to personally pay a heavy price for it, but I am ready,” Modi said at a conference in what was seen as a message to the U.S. administration, which has been seeking greater access to India’s agriculture and dairy sectors.

India and the U.S. have had five rounds of negotiations on a bilateral trade agreement, but haven’t been able to clinch one so far.

On Wednesday, Trump signed an executive order to place an additional 25% tariff on India for its purchases of Russian oil. The order would go into effect in 21 days and bring the combined tariffs imposed on India to 50%.