Trump rejigs tariff rates ahead of deadline, levies 40% duties on all transshipped goods

U.S. President Donald Trump signed an executive order Thursday that modified "reciprocal" tariffs on dozens of countries, with updated duties ranging from 10% to 41%.

After the announcement, Trump told NBC News in a phone interview that the expansive new tariffs were going "very well, very smooth," and that he would be open to more compelling offers.

"It doesn't mean that somebody doesn't come along in four weeks and say we can make some kind of a deal," he said.

The latest tariff rates will start from Aug. 7, a White House official told CNBC-TV18 in an email statement.

"This should not be read as an extension, but to give [the U.S.] Customs and Border Protection ample time to implement these [tariffs]," the official added.

Among countries facing the steepest "reciprocal" tariffs, Syria has the highest rate at 41%. Exports from Laos and Myanmar to the U.S. will be subject to a 40% duty. Switzerland and South Africa will be hit with tariffs of 39% and 30%, respectively.

For some Asian nations that have not confirmed a trade pact with the U.S., the latest executive order offered some relief with lower duties. The new tariff rates on imports from Thailand will be lowered to 19% from 36%, and those from Malaysia will be reduced to 19% from the 24% rate set earlier.

Shipments from Taiwan will face a 20% tariff, lower than the 32% rate set earlier.

All goods that are considered to have been transshipped to avoid applicable duties will also be subject to an additional 40% tariff, according to the White House.

Countries that are not listed in the latest order will face an additional duty of 10%, the order said. The updated directive modifies tariffs imposed under the earlier executive order issued in April.

Trading partners that have reached or are near reaching trade and security agreements with the U.S. will be subject to the modified rates until those agreements are concluded, according to the executive order.

The executive order also confirmed new tariff rates agreed upon with trading partners, including the European Union, Japan, South Korea, the Philippines and Indonesia.

Wendy Cutler, a former deputy U.S. trade representative, noted that countries running trade deficits with the U.S. were also hit with higher tariffs.

"What seems to be absent from the executive order is whether existing or new rules of origin will be issued and/or negotiated. This is of key importance in light of the 40 percent transshipment tariff now applicable beyond Vietnam," added Cutler, who is also a senior vice president of the Asia Society Policy Institute.

Continued uncertainties around upcoming sectoral tariffs and more potential tariff increases will be of particular concern, Cutler said, especially if the Trump administration believes countries are not implementing agreed-upon terms in "good faith."

Agreeing, Stephen Olson, senior visiting fellow at ISEAS-Yuosf Ishak Institute and a former U.S. trade negotiator, said: "Don't assume this is the end of the story ... more deals and further tariff increases are almost certain to follow."

"Countries wishing to trade with the US will now face dramatically higher tariffs that could be further increased at the whim of a president who has shown a disdain for trade rules and agreements, even those he himself has signed," Olson added.

Trump also followed through on his plan to raise tariffs on exports from Canada to 35% from 25%, starting Friday, barring goods that are covered under the U.S.-Mexico-Canada free trade pact he signed during his first term.

In early April, Trump announced that the U.S. would impose a 10% blanket tariff rate nearly worldwide, along with individualized duties of up to 50% for dozens of countries.

Days later, Trump suspended the higher tariff rates for 90 days, which would have seen them restart on July 9. While claiming that he had no plan to extend that deadline, Trump signed an executive order delaying the date to Aug. 1, days before the new tariff rates were set to kick in.

In the lead-up to the Aug. 1 deadline, Trump dispatched letters to more than two dozen world leaders outlining new tariff rates on their exports to the U.S.

Most of those new tariff rates were close to the April 2 levels that Trump had initially set using a formula that economists had criticized.

On Monday, Trump had floated the idea that he would raise the baseline tariff rate to around 15% or 20% on imports from countries that have not negotiated separate trade agreements with the U.S.

Asian markets largely fell following the latest announcement, with South Korea's Kospi index shedding over 3%, while Japan's Nikkei 225 dropped 0.66%. Over in Australia, the S&P/ASX 200 benchmark fell 0.76%.

Tariffs on exports from China, which face an Aug. 12 deadline following Beijing's truce with the U.S., are not impacted by this latest directive. Both sides have called the recent U.S.-China trade talks in Stockholm positive, but no agreement has been finalized.

"As the dust settles, China has an opportunity to pick up the pieces and seize the mantle, perhaps rhetorically more than in practice, as the leader of rules-based trade," Olson of ISEAS-Yuosf Ishak Institute said.

China will "correctly" perceive the transshipment provision as directed against its interests and may weigh a response in its ongoing trade talks with the U.S., he added.

— CNBC's Kevin Breuninger contributed to this story.