A summary of the trade deals and tariffs for America’s top trading partners, listed in order by 2024 U.S. total trade in goods, is shown below. It should be noted that some of the details regarding the trade deals are yet to be determined, and there are certain product exemptions for any specific tariff. Although certain trade deals have been made, any trade deal is in effect only as long as both countries want it to be. 1. Mexico - Mexico and the U.S. agreed to extend an existing trade deal as talks continue to reach a new trade deal. The U.S. extended its 25% tariff on Mexico, excluding goods covered by the USMCA. 2. Canada - As a result of failed trade talks, the U.S. implemented a 35% tariff in August on goods not covered by the USMCA, up from the previous 25% tariff rate that was in effect. Another 10% tariff was added in October by the Trump Administration in response to an advertisement by the Province of Ontario that featured President Ronald Reagan criticizing tariffs. 3. China - In October, following trade talks, the U.S. announced it would reduce the “fentanyl” tariff on China from 20% to 10%, and extend the 10% base reciprocal rate for one year. 4. Germany - A new trade deal with the European Union includes a blanket tariff rate of 15% on all goods imported from the E.U., and an agreement by the E.U. to purchase $750 billion of American energy and increase investment in the U.S. by more than $600 billion. 5. Japan - A new trade deal includes a 15% tariff rate on goods imported from Japan, and a commitment by Japan to invest $550 billion in the U.S. 6. South Korea - A new trade deal includes a 15% tariff rate and pledge to invest $350 billion in the U.S. 7. Taiwan - The U.S. imposed a 20% tariff in August on most goods from Taiwan, with further trade talks expected. 8. Vietnam - A new trade deal with Vietnam includes a 20% tariff rate on goods imported from Vietnam and 40% on goods transshipped (goods from other countries shipped through Vietnam to the U.S.). Certain goods were exempt from the tariff. 9. United Kingdom - A new trade deal includes a tariff rate of 10% on goods imported from the U.K. The 10% tariff rate on vehicles imported from the U.K. only applies to a quota of 100,000 vehicles a year, which is approximately the number of cars currently sold into the U.S. Vehicles exceeding the quota face a 25% tariff. U.K. steel exported to the U.S. is subject to a 25% tariff, which is lower than the 50% global rate. 10. India - No new trade deal as of August deadline, resulting in the U.S. implementing an additional 25% tariff rate on August 27 on top of the existing 25% tariff rate. The resulting 50% tariff rate was the highest rate of any top trading partner. A new trade deal is expected soon. The Yale Budget Lab estimated an overall average effective tariff rate of 17.9% for tariff policies in effect as of October 31, the highest since 1934. The tariff landscape changed frequently in 2025 and may change again in 2026. Legal challenges to tariffs have made their way to the Supreme Court with a decision expected in 2026. However, it is likely that tariffs will remain in effect to at least some degree. The economic effects of changes in U.S. tariff and trade policy will take years to discern, as U.S. corporations will have to consider the new and changing trade landscape into long-term strategic and financial decisions, including product sourcing, cost structure, product pricing, product mix, business investment, and changes in export and import markets. While tariffs can be implemented quickly, strategic and financial planning by U.S. and foreign businesses is a long-term process. The ultimate questions are how tariffs will impact costs to businesses, prices to consumers, U.S. economic growth, the labor market, changes in international trade, sourcing decisions by U.S. businesses, and U.S. economic leadership. Inflation The graph below shows the annualized U.S. inflation rate for the 3-year period ending October 2025, as measured by the twelve-month change in the Consumer Price Index (CPI) for all items (blue line) and the Consumer Price Index, less Food and Energy (green line). Stripping out the relatively volatile categories of food and energy from the Consumer Price Index provides a measure of core inflation. Although Americans may have been hoping for price declines in 2025, particularly in food, that hasn’t happened. Inflation trended downward as 2025 began, decreasing from 3.0% in January to 2.3% in April, but steadily increased back to 3.0% in September, the highest rate of inflation since January. Core inflation, measured by stripping out the relatively volatile food and energy categories from the CPI all items index, matched the overall inflation rate of 3.0% in September. Core inflation had generally declined from a 4.0% rate in October 2023 before bottoming out at 2.8% in May 2025. More importantly, inflation kicked up significantly in recent months over several categories.
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Center for Business and Economic Insight
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