Anne d’Hynenzio and Dee-Ann Durbin, AP Business Writer
American businesses and consumers will soon get a better idea of how it will affect President Donald Trump’s Foreign Trade Agenda President is leviing high tariffs on products from dozens of countries.
It’s almost 100 years have passed since the country had as high import tax rates as one set on Thursday. However, the personal impact on business costs and consumer prices can vary as differently as tariffs apply to products from nearly 70 US trading partners, from complex economies like the European Union to Lesotho, a small African nation.
Exports from the majority of them are taxed at 15%. In a small number of Asian countries, the fee is 19%. The remaining products are subject to 20% to 50% tax. Meanwhile, if a US-China trade agreement has not been agreed previously, a 55% tariff on Chinese goods is expected to take effect next week.
US and international companies have been dealing with Trump’s fluctuating tariffs on certain products and countries in a variety of ways since February. Many automakers seemed to be absorbing costs for now. However, recent government data shows that retail prices for groceries, furniture and appliances began to creep up in June.
Because tariffs are taxes on imports, economists expect our consumers to eventually step on at least part of the bill.
Yale’s Budget Institute is estimated to have been implemented on Thursday along with previous tariffs on certain sectors such as cars and iron. According to the Center for Nonpartisan Policy Research, this amounts to a $2,400 loss in income per US household
The forecast is based on an analysis of duties conducted between this year and Wednesday, as well as a doubling of collections of items made in India that Trump said would be doing near the end of August.
“Retailers have been able to accommodate pricing up until now, but the new tariff increase will significantly increase costs for US retailers, manufacturers and consumers,” John Gold, vice president of supply chain and customs policy for the National Federation of Retail Trade Group, said in a statement in an email to The Associated Press.
Here are some things you need to know about tariffs and where US consumers are most likely to notice effectiveness:
How did you get here?
In April, Trump announced import taxes on goods coming into the US from 66 countries, the European Union, Taiwan and the Falkland Islands. He said “mutual” tariffs are intended to boost domestic production and restore fairness in global trade.
The president suspended the country’s inherent tariffs a week later, but applied a 10% tax to most imports. In early July he began notifying the country on August 1 that exports would be subject to higher tariffs unless the trade agreement was reached. A week ago, he pushed the start date through Thursday.
Employees will sort medicines at drug wholesale stores in Guwahati, India on Thursday, August 7, 2025 (AP Photo/Anupam Nath)
Employees at the clothing manufacturing facility are working on clothing in New Delhi, India on Thursday, August 7, 2025 (AP Photo/Rishi Lekhi)
Sheema Malik, director of the second left clothing manufacturing facility, directs employees wearing dresses in New Delhi, India on Thursday, August 7, 2025 (AP Photo/Rishi Lekki)
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Employees will sort medicines at drug wholesale stores in Guwahati, India on Thursday, August 7, 2025 (AP Photo/Anupam Nath)
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In the meantime, Trump announced a 35% tariff on imports from Canada, but action in Mexico was delayed while negotiations continued. However, during Trump’s first term, free trade agreements with Mexico and Canada have reached it, preventing most of those countries from punishing their mission.
The president also ordered a 50% tariff on goods from Brazil. This week he signed an executive order to raise India’s tariff rate from 25% to 50% on Russian oil purchases. This timing gives India and Russia an opportunity to negotiate with the Trump administration.
Other non-country-specific obligations, such as the 50% tariffs on imported aluminum and steel announced in June, remain in place. Trump also threatened 100% tariffs on computer chips not made in the US, and the administration said tariffs were still coming on imported medicines.
Customs are already affecting prices
The US Department of Commerce reported on July 31 that prices rose 2.6% in June, up from 2.4% per year in May. In early July, the government reported that its main inflation measure, the consumer price index, was also in the top position in June due to increased costs for furniture, toys and other frequently imported items.
According to Yale’s budget lab, shoppers need to be prepared to pay more for clothes and shoes as total tariffs “disproportionately affect clothes and fabrics.” We estimate that shoe prices will temporarily rise by 39%, up 19% from the current location. For apparel, Budget Labs have comparable figures at 37% and 18%.
Overall, Americans face an average tax of 18.6% on imported products, the Research Center says, which is the highest tax rate since 1933.
Food and drink prices will rise
Tariffs will almost certainly trigger food prices, according to an analysis by nonpartisan tax foundations. The US is not creating enough certain products, such as bananas and coffee, to meet demand. Fish, beer and liquor are likely to be expensive, the foundation said.
The US Wine Trade Alliance and other alcoholic industry trade groups have sent a letter to Trump warning that there will be a 15% tariff on European wine and spirit.
“President, we are heading into the most important season for the industry, so we need toast rather than tariffs,” read Wednesday’s letter.
Wine distributors and retailers have avoided price increases so far by accelerating shipments from France and other EU countries earlier this year. However, customers may see European wines rise by 30% in September as EU tariff rates rose to 15% on Thursday, said Ben Anneff, chairman of the US Wine Trade Union.
Car prices are stable – so far
Some automakers have already raised prices to combat tariffs. Ferrari, a luxury sports car manufacturer, said last week it was waiting for details of Trump’s trade deal with the EU before reducing the 10% extra charges that most vehicles in the US.
Mostly, carmakers waited for details rather than handing over customs fees to consumers. But that could change.
General Motors said on July 22 that the impact of tariffs could become more pronounced in the third quarter of the year. GM estimates tariffs will cost between $4 billion and $5 billion this year.
Toyota reported Thursday that profits fell by 37% in the April-June quarter, cutting its full-year revenue forecast, primarily due to Trump’s tariffs.
Still cloudy picture
Even with so many new tariffs being kicked, the tariff situation remains in liquidity. Trump’s use of the Emergency Powers Act to enforce tariffs has been challenged in court. The case is expected to be caught up in the U.S. Supreme Court.
Furthermore, there are no fixed tariffs on goods from China. Consumers may have more benefits when they provide tax exemptions on small plots sent from other countries.
Last week, Trump signed an order suspending the “minimum” exemption that allowed shipments under $800 to enter US tax exemptions. International e-commerce companies use this rule widely to avoid paying customs fees.
Trump rescinded the exemption for Chinese and Hong Kong’s tariff-free goods in early April. It is currently set to be eliminated on August 29th due to a low value package from all countries.
Colleen Barry, AP reporter in Milan, contributed to this report.
Original issue: August 7, 2025, 2:11pm EDT
