Little clarity from tariff announcements as Aug. 1 deadline looms

The Trump administration continued its high cadence of tariff-related announcements in the lead-up to a self-imposed Aug. 1 deadline to establish new import tax rates on products from various countries, but major questions remain.

The White House announced new tariff rates on products from the European Union, Japan, and Indonesia, though confirmed details of nonbinding agreements with those trade partners remain hazy. The White House appears to still plan to raise the baseline import tax in the U.S. for products from the 29 countries using a national security law whose application has been successfully challenged in court, pending appeal by the administration, the next court date of which will occur on July 31.

EU and Trump administration officials reportedly differed on details of the agreement at first, mainly around which products new 15% tariffs will apply to. But the new duties now appear that they will cover imports into the U.S. that previously faced higher import taxes, such as automobiles (at 25%), and product-specific tariffs expected later this year to exceed 15% on pharmaceuticals and semiconductors. However, steel, aluminum and copper product tariffs will reportedly remain at 50%. There also appears to be agreement for certain amounts of U.S. exports to the EU, and investment into the U.S. by EU companies, though the details of that remain to be disclosed. , The U.S. and EU are continuing dialogue around a variety of economic disagreements between the two sides of the North Atlantic.

A fact sheet published by the White House on July 28 claims that the EU agreed to invest an additional $600 billion in the U.S. and purchase $750 billion of U.S. energy exports, but as an economic bloc of 27 different, generally free market economies, it’s unclear how that would work in practice. The document also contains several statements of intent to continue dialogue around issues ranging from country-of-origin rules for exports, to agricultural regulations. The White House also said it achieved an agreement to, “maintain zero customs duties on electronic transmissions,” though it is not immediately clear if that impacts several EU member states’ digital services taxes (DSTs).negotiations around a global minimum tax.

After a similar announced trade outline with Japan on July 22, a White House fact sheet on the agreement with Japan touts a $550 billion foreign direct investment figure, with a claim that “the United States will retain 90% of the profits from this investment,” with little additional detail. Japan was already the largest source of FDI into the U.S., at $754 billion in 2024, and the Japanese government has publicly contradicted claims made by the administration about the arrangement, the announcement of which may have been driven by a looming possible change in government following elections in Japan.

“The Japanese will finance the project. We will give it to an operator and the profits will be split 90% to the taxpayers and 10% to the Japanese,” Commerce Secretary Howard Lutnick asserted in public comments the week of the announcement. That investment would primarily be in semiconductors, shipbuilding, energy, pharmaceuticals, and critical minerals.

However, according to multiple media reports, Japanese officials have quietly repudiated several major parts of the administration’s announcement. As of July 25, there is no written agreement and the Japanese government released a document stating that profit-sharing from investment into the U.S. would be “based on the degree of contribution and risk taken by each party,” meaning it is Japan’s understanding that the U.S. government would need to directly invest as well in order to claim any profit. Japanese officials also suggested their understanding of the agreement was that additional investment could be “up to” $550 billion though that figure is 14% of Japan’s current gross domestic product, a measure of a country’s overall economy, making it unlikely the Japanese government would be able to achieve that large of a figure. A photo shared on social media by a senior White House official on July 22 also shows hand-made edits to a document about the announcement on President Donald Trump’s desk, and different tariff and investment details than publicly announced, creating more confusion over the situation. But Japanese officials have confirmed some concessions around rice imports from the U.S. and auto import regulations.

According to the White House baseline tariff rates on Japanese imports will increase to 15%, while the baseline Indonesia tariff rate will be 19%, likely both in effect beginning Aug. 1, though executive orders have yet to be issued. While these are lower tax increases for U.S. importers of products from both countries than anticipated in communication by Trump earlier this month with the Japanese and Indonesia governments, they are substantial increases from the prior average tariff rates for products from those countries. According to multiple estimates from analysts and economists tracking the trade policy changes following those announcements, the average U.S. tariff on all imported products will climb to nearly 20%. That is several multiples larger than the average rate of 2.5% in 2024, and the highest since the 1930s. Nongovernmental think tanks range in estimated annual household impact, including $1,300 and $2,300, wiping out or exceeding the impact of continuing lower income tax rates from recently passed legislation known as the One Big Beautiful Bill Act (P.L. 119-21).