Trump Unveils New Tariff Letters Targeting Philippines, Sri Lanka, and Others Ahead of August 1 Deadline#

Details of the New Tariff Letters#

• Countries and Rates (effective August 1, 2025):
  • Philippines: 20% tariff, down from 25% in April, reflecting ongoing trade negotiations. The US imported 14.1 billion in goods (electronics, auto parts, textiles) from the Philippines in 2024.link link
  • Sri Lanka: 30% tariff, reduced from 44% in April. The US had a 2.6 billion trade deficit with Sri Lanka in 2024.link link
  • Brunei and Moldova: 25% tariff each, with Brunei’s rate up from April and Moldova’s aligned with prior announcements. Combined US trade deficits: 196 million.link link
  • Algeria, Iraq, Libya: 30% tariff each, with Iraq’s rate down from 39% and Algeria’s unchanged. Iraq accounted for 5.9 billion of the 7.2 billion combined trade deficit with these countries.link link
• Context: These tariffs follow a 90-day negotiation period initiated in April during Trump’s “Liberation Day” announcement, where he paused reciprocal tariffs to secure “90 deals in 90 days.” Only two deals (UK and Vietnam) have been finalized, prompting the August 1 deadline.link

Sector-Specific Tariffs#

• Copper: A 50% tariff on copper imports, announced July 8, 2025, caused COMEX copper futures (HG=F) to drop over 3% on July 9 after a 25% surge above global prices. A Section 232 investigation into copper’s national security impact is ongoing, with findings due by November 22, 2025.link link
• Pharmaceuticals: Trump threatened 200% tariffs on drug imports, with a potential delay of 12–18 months to allow drugmakers to adjust. A Section 232 investigation into pharmaceuticals, covering active ingredients and medical countermeasures, began April 14, 2025, with comments due by May 7, 2025.link link
• Exemptions: Copper, pharmaceuticals, semiconductors, lumber, critical minerals, and energy products are exempt from country-specific tariffs but subject to ongoing Section 232 investigations. USMCA-compliant goods from Canada and Mexico are also exempt, except for Section 232 tariffs.link

Key Trading Partner Updates#

• Vietnam: Secured a deal for a 20% tariff, down from 46%, but faces a 40% tariff on transshipped goods (e.g., from China). The US had a 123.5 billion trade deficit with Vietnam in 2024.link
• European Union: The EU is open to a 10% universal tariff but seeks exemptions for key sectors. No tariff letter was issued, but Trump indicated one is forthcoming. Trade talks continue to avoid escalation.link
• Canada: After scrapping its 3% digital services tax on US tech firms, Canada resumed trade talks with the US, aiming for a deal by mid-July. A Canada-specific tariff is expected within days, separate from USMCA “fentanyl” tariffs.link link
• Other Countries: Earlier letters targeted South Africa, Malaysia, and Thailand (25–36% tariffs), among others. Laos and Myanmar face the highest rates at 40%.link link

Economic and Market Impacts#

• US Economy: The tariffs are projected to raise 3 trillion over a decade but increase US household costs by 1,200 annually in 2025, equivalent to over a year’s worth of inflation. Economic growth may be halved in 2025, per Yale’s Budget Lab.link link
• Market Reactions: The S&P 500 and Nasdaq saw significant drops in April 2025 (4.88% and 5.97%, respectively) after initial tariff announcements. Copper prices hit record highs, and pharmaceutical stocks slid after Trump’s latest threats.link link
• Global Response: China warned of countermeasures, calling the tariffs “unilateral bullying,” while Japan and the EU are pursuing negotiations to mitigate impacts. Canada and the EU have retaliated with tariffs on US goods (e.g., 25% on Canadian imports, EU tariffs on boats and spirits).link link

Criticisms and Challenges#

• Inflation Risks: Analysts warn that Trump’s tariffs could exacerbate US inflation, with copper and pharmaceutical price hikes already impacting factories and consumers.link
• Legal Challenges: The US Court of International Trade ruled in May 2025 that Trump’s use of the International Emergency Economic Powers Act (IEEPA) for “fentanyl” and reciprocal tariffs is unconstitutional, though stays pending appeal allow tariffs to persist.link link
• Trade Negotiations: The failure to secure most of the promised “90 deals” has led to tariff reinstatement, with only Vietnam and the UK reaching agreements. India’s deal, aiming to double bilateral trade to 500 billion by 2030, awaits approval.link link

Sentiment and Outlook#

• Sentiment on X: Posts express concern over tariff-driven inflation and market volatility, with some noting strategic reductions for allies like the Philippines but criticizing the lack of clarity in tariff calculations.link
• Global Implications: The tariffs, affecting minor trading partners (e.g., 29 billion in imports from the seven newly targeted countries), may have symbolic weight but risk alienating allies and disrupting supply chains, particularly in the Philippines (electronics) and Iraq (oil).link link
• Next Steps: Additional tariff letters are expected, with Brazil’s rates due soon. The EU and Canada face tight deadlines to finalize deals, while ongoing Section 232 investigations may expand tariffs on pharmaceuticals and semiconductors.link link

Conclusion#

President Trump’s latest tariff letters, issued July 9, 2025, target the Philippines (20%), Sri Lanka (30%), and five others, effective August 1, escalating his trade war. Coupled with 50% copper tariffs and potential 200% pharmaceutical tariffs, these moves risk inflation and global tensions but aim to address trade deficits. Stakeholders should monitor negotiations and market impacts via www.whitehouse.gov or www.commerce.gov for updates on trade deals and Section 232 investigations.link link link