New tariffs are being implemented across the board. On Wednesday, President Donald Trump announced a 10% tariff that will apply to all countries, with an exception for goods compliant with the United States-Mexico-Canada Agreement (USMCA) trade agreement. Some countries will be more affected than others, as Trump aims to level the playing field by imposing reciprocal tariffs.
### 1. Some countries face higher tariffs as “worst offenders”
In addition to the blanket 10% tariff, goods imported from countries identified by Trump as having imposed high tariffs will face even higher tariffs upon entering the U.S. There are 60 countries on this list, including China, which will be among the most impacted, with a tariff rate of 34%. Combined with existing tariffs of 20%, the total tariff on Chinese imports will be 54%. Similarly, Cambodia will face a tariff rate of 49%, and Vietnam 46%. Imports from the European Union will incur a 20% tariff.
Canada and Mexico are not on the “worst offenders” list, but non-USMCA-compliant goods from these countries will still be subject to 25% tariffs. Notably, the pause on tariffs for foreign-made automobiles has been removed.
### 2. Implementation timeline for tariffs
Consumers will soon feel the impact of these tariffs. Tariffs on foreign-made automobiles will be effective from midnight Thursday. The general 10% rate will be effective from April 5, and by April 9, higher, customized tariffs for goods from certain countries will take effect.
Businesses will have limited time to adapt. Major retailers like Walmart, Target, and Costco are seeking ways to mitigate the impact on consumers due to high inflation, reportedly reaching out to suppliers in China to absorb some of the tariff costs. If unsuccessful, these retailers may have to increase prices, further straining consumer budgets, or accept pressure on their profit margins, which are generally slim.
### 3. De minimis exemption closure
A previously controversial exemption allowed low-cost items imported from Asia, costing less than $800, to avoid tariffs. As of May 2, this exemption will close, and items will be subject to a 54% tariff rate. This change will impact goods purchased from companies like Shein and Temu (owned by PDD Holdings), potentially prompting price increases. In contrast, Amazon may benefit from these changes, having launched a discount store named “Amazon Haul” last year to offer competitively priced items.
### Implications for investors
Tariffs are expected to raise prices and affect the margins of many businesses, but they may not be permanent. Trump is known as a dealmaker, suggesting that tariffs might decrease or only last temporarily. Retailers such as Walmart and Costco might experience short-term effects but are anticipated to adapt over time.
For investors, this situation could present opportunities, particularly in a market panic scenario. Long-term investors are advised to focus on robust businesses with strong margins that can endure these challenges. Adopting a prudent investment mindset, akin to that of Warren Buffett, could prove beneficial during these times.
