Dee-Ann Durbin and Anne d’Hynenzio, AP Business Writer
It’s been almost 100 years since the US had tariffs at a level that it could reach next Friday.
Once President Donald Trump’s planned tariffs come into effect, Americans will receive an average tax of 18.3% on imported products, the highest rate since 1934.
Late Thursday, Trump ordered new tariff charges for 66 countries, the European Union, Taiwan and the Falkland Islands. Among them are 40% tariffs on imports from Laos, 39% tariffs on goods from Switzerland, and 30% tariffs on goods from South Africa.
Other trading partners, such as Cambodia and Bangladesh, have been reduced to the level of tax on exports to the US from which the president threatened to impose. Trump has postponed the start date for all changes from Friday until August 7th.
Duties are taxes and US consumers may make at least a portion of their invoices on their feet. The Budget Lab estimated prices would rise 1.8% in the short term as a result of the trade war that the US carried over this year. This amounts to a loss of income of $2,400 per US household, the group said.
Companies handle customs duties in a variety of ways. Many automakers seem to be engulfing customs costs for now. However, Essilorluxottica, the world’s largest eyewear manufacturer, said it had raised US prices due to tariffs. Ray-Ban manufacturers grind lenses and sunglasses from Mexico, Thailand and China and export premium frames from Italy.
“So far, retailers have been able to maintain their pricing line, but the new tariffs will affect products in the coming weeks,” said David French, chief lobbyist at the National Retail Federation, the nation’s largest retail industry. “We’ve heard directly from small retailers who are concerned about their ability to stay in business in the face of these unsustainable tariff rates.”
Long Beach Container Terminal (LBCT) at the port of Long Beach, California, Thursday, July 31st, 2025 (AP Photo/Damiand Bargane)
The containers are stacked at a freight terminal in Frankfurt, Germany on Friday, August 1, 2025 (AP Photo/Michael Probst)
Workers will wait for customers of Roopam Sarees, which sells clothing imported from India, in Berkeley, California (AP Photo/Noah Berger) on Thursday, July 31, 2025.
Nespresso Carton (Laurent Gilliero/Keystone via AP) is on display at Nestle’s own supermarket in Vevey, Switzerland on Thursday, February 13th, 2020
On Wednesday, April 16th, 2025, I walked by a store selling Rolex watches at Grendel Stres in Lucerne, Switzerland. (urs flueeler/keystone via ap)
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Long Beach Container Terminal (LBCT) at the port of Long Beach, California, Thursday, July 31st, 2025 (AP Photo/Damiand Bargane)
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Here’s what we know about tariffs and how their impact will affect U.S. consumers:
How did you get here?
Trump announced a significant import tax on goods coming into the US from almost every country in April. 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 that higher tariffs would come into effect on August 1st unless trade transactions reached.
When it announced new rates in dozens of countries on Thursday, Trump delayed implementation until August 7th.
In the meantime, he announced that a 35% tariff on imports from Canada will take effect on Friday. However, while negotiations continued, Trump delayed his actions in Mexico and China.
Other obligations inherent to the country also remained on Friday, such as the 50% tariffs on imported aluminum and steel announced in June.
The tariffs are already in place
The Trump administration has reached deals with the European Union, Japan and South Korea, which have implemented 15% tariffs. The contract with the Philippines imposes a 19% tariff while the contract with Vietnam imposes a 20% collection. This week, Trump announced a 25% tariff on goods from India and ordered a 50% tariff from Brazil.
Customs duties have been challenged in court
The U.S. International Trade Court, a federal court specialising in trade disputes, ruled in May that Trump outweighed his powers when he invoked emergency laws to implement tariffs.
On Thursday, a 11-person review board of the U.S. Court of Appeals considered the case, and the judge expressed skepticism that Trump could impose tariffs without Congressional approval. The case is expected to be caught up in the U.S. Supreme Court.
Customs are already affecting prices
The U.S. Department of Commerce said Thursday that prices rose 2.6% in June, up from the 2.4% annual pace in May, up from the Federal Reserve’s 2% target. Furniture, computers and other items that come from overseas were often one of the categories with high average prices.
Wendong Chan, an associate professor at the Dyson School of Applied Economics and Management at Cornell University, said U.S. consumers will be able to see prices rise in the coming months for other products, including large quantities of steel and aluminum.
However, Chan said the 15% tariff does not mean that prices will rise 15% anytime soon. He said the companies were aware of the tariff deadline and were trying to stockpile the goods and take other measures to mitigate the impact.
Some Americans will see profits
Chan noted that Trump’s trade transactions often contain certain provisions designed to boost US exports. For example, an agreement with the European Union requires European companies to purchase $750 billion worth of natural gas, oil and nuclear fuel from the United States over three years.
Some US farmers can also see potential benefits, Zhang said. According to the International Trade Council, Vietnam has agreed to purchase $2 billion in US agricultural products over three years, including corn, wheat and soybeans, as part of the trade agreement.
However, Chan warned that agricultural agreements tend to be short-lived. In the long term, uncertainty about tariffs could potentially lead countries like China to retreat from the US agricultural market, he said.
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.
Ben Aneff, managing partner at Tribeca Wine Merchants and president of the US Wine Wine Trade Alliance, said shoppers will see prices rise 20% to 25% at his store, and prices will rise 20% to 25% from Friday due to the decline in gold’s value.
“No one can afford to eat the tariffs. It’s handed over,” Amph said.
Aneff said shoppers don’t feel the impact of higher duties than before, as dealers and retailers from France and other European Union countries accelerated their freight earlier this year. However, with the EU tariff rate set to reach 15% in a week, Aneff expects European wine prices to rise 30% in September.
The prices of clothing and shoes are already creeping up
97% of clothing and shoes sold in the US are imported primarily from Asia. China is leading the pack, but companies have further changed their sourcing to Vietnam, Indonesia and India.
Steve Lamar, president and CEO of the trade group, refused to estimate how much the tariffs will increase the prices of apparel and footwear. However, businesses may offer discounts or drop products this fall. This is because it is too expensive to produce.
Matt Priest, president and CEO of The Footwear Distributors and Retailers of America, estimates that shoe prices are beginning to rise towards the shopping season when the prices of shoes are back. He estimates price increases in the range of 5% to 10%.
Car prices are stable – so far
Some automakers have already raised prices to combat tariffs. Luxury sports car maker Ferrari said Thursday it was waiting for details of Trump’s trade deal with the European Union before reducing the 10% extra charge installed in April on most US vehicles.
However, most of the time, automakers have been waiting for details, so they haven’t raised prices. Kelly Blue Book, which monitors car pricing, said the average US new car cost $48,907 in June, costing just $108 since May.
But that could change. General Motors said last week that the impact of tariffs could become prominent in the third quarter of the year. GM estimates tariffs will cost between $4 billion and $5 billion this year.
AP business writer Colleen Barry reported from Milan.
Original issue: August 1, 2025, 11:45am EDT
