10% to 41%! The United States announced new tariffs will take effect on August 1st! What signals does this send?

On July 31, 2025 local time, US President Trump signed an executive order, determining the "reciprocal tariff" rates to be imposed on multiple countries and regions, with specific rates ranging from 10% to 41%.

The executive order states:

The executive order also states that a uniform 10% tariff rate will apply to all countries not listed. Furthermore, if any country or region circumvents tariffs by transshipping goods through a third party, their goods will be subject to a 40% transshipment tax.

In addition, a senior U.S. government official said that the United States will implement new rules of origin in the coming weeks to determine tariff rates on transshipped goods.

I. Interpretation of Core Policy Signals

1. Strategic goal: Reshape trade rules hegemony

   • Trump, under the guise of "tariff parity" (i.e., the United States imposes the same tariff rates as its trading partners), is essentially forcing countries to renegotiate trade terms. Evidence suggests he is targeting countries with large trade deficits (such as the European Union and Vietnam), using high tariffs to pressure industries to relocate to the United States. .

   • Differentiated tax rate design : The extremely high tax rates in countries such as Syria (41%) and Myanmar/Laos (40%) target specific geopolitical rivals and deter other countries from complying with US rules. Although the tariff rate is set at 15% by allies such as the EU, Japan and South Korea, they need to make up the difference in tariffs, thus weakening their price advantage. .

2. Plug supply chain loopholes

   • Transit taxes and rules of origin : 40% punitive tariffs will be imposed on goods that evade tax by transshipping through third countries, and new rules of origin are planned to completely block transshipment trade (e.g., goods from Southeast Asia transiting through Cambodia to the United States). Cambodia previously negotiated a reduction in the tariff rate from 49% to 19%, but was forced to accept conditions such as the import of US agricultural products, highlighting the US's "rules for markets" strategy. .

3. Dividing allies and pressuring developing countries

   • Examples of allies "buying out" : The EU traded $600 billion in US investment and $750 billion in energy purchases for a 15% tariff; Japan compromised its 50% tariff on steel and aluminum products in exchange for a 15% tariff on other goods. .

   • Costs for developing countries : Vietnam and Cambodia accepted US investment and import requirements to reduce tariffs, but were forced to cut off some supply chain ties with China, sacrificing industrial autonomy. .

II. Policy Changes: Three-Phase Evolution

1. Concept incubation period (February-March 2025)

   • Trump proposed "reciprocal tariffs" for the first time, declaring that "the United States will impose the same amount as foreign countries impose", but reserved room for exemptions as a bargaining chip. The CICC report predicts a base tariff rate of 16.3%, with an extreme scenario reaching 20.2% (close to the trade protection level of 1933). .

2. Aggressive implementation period (April 2025)

   • The first round of tariffs on April 3rd far exceeded expectations: China 34%, Vietnam 46%, and the EU 20%. , even affecting Australia's uninhabited islands (symbolic tax) .

   • Intensified conflicts : Multiple countries retaliated (the EU threatened retaliatory tariffs), and the US adjusted its tariffs on China several times in April (from 34% to 125% and then back again), exposing the arbitrariness of its policies. .

3. Callback and solidification period (July 2025)

   • Significantly lowered tax rates : Most countries (such as Japan and South Korea) set it at 15%, Vietnam reduced it to 20%, Cambodia/Thailand 19%, and only Syria (41%) and Myanmar/Laos (40%) maintained high rates. .

   • Solidify the core mechanism : retain the 10% "base tariff" (unlisted countries), 15% "mainstream tariff rate" and 40% transit tax, forming a "tariff pyramid" system .

3. Future Trend Forecast

1. Short term: Game deepening, technological barriers upgrading

   • The US will tighten its rules of origin by scrutinizing commodity supply chains (such as semiconductors and textiles) and cracking down on the "China + Southeast Asia" re-export model. Companies will be required to submit proof of full-chain production. .

   • Emerging market divergence : Countries that have not reached an agreement, such as Thailand and Indonesia, may be forced to accept higher tax rates; small countries such as Lesotho will turn to regional cooperation (such as the African Free Trade Area). .

2. Medium term: Inflation and recession risks coexist

   • The US economy is under pressure : According to estimates, tariffs could push up PCE inflation by 1.1% and reduce GDP growth by 0.8% (baseline scenario). If the US dollar depreciates, inflationary pressure will intensify. .

   • The Federal Reserve's policy shift : to hedge against recession risks, it may cut interest rates earlier than expected (Q3-Q4 2025) .

3. Long term: Global supply chain restructuring accelerates

   • Nearshoring trend : Mexico and Canada enjoy preferential tariffs (10-15%) due to the USMCA agreement, attracting foreign investment. .

   • China's response strategy :

     • Increase fiscal stimulus (such as consumer subsidies) in the short term to offset the decline in exports (GDP growth may fall by 0.5-1%) ;

     • Long-term deepening of the Belt and Road Initiative and the Regional Comprehensive Economic Partnership (RCEP) to build Africa-US supply chains .

IV. Conclusion: The Global Cost of Hegemony

Trump's "reciprocal tariffs" are essentially the weaponization of rules : using unilateral tariffs to force countries to accept the US-dominated trade system. Although some tariffs have been reduced in the short term through negotiations, technical barriers such as rules of origin and transit taxes will become new sources of trade friction. Global supply chains are forced to choose sides, driving up production costs and exacerbating inflation, ultimately bearing the brunt of the cost for consumers everywhere. Historical experience (such as the 1930 Smoot-Hawley Act) shows that this type of protectionism will ultimately backfire on the economy. As the game shifts from "high tariffs" to "fine-grained rules," the world must be wary of a more subtle "new Cold War"!