Updated U.S. Tariff Rates Set to Impact Global and State Trade

President Donald Trump signed a sweeping executive order on July 31 imposing a new round of tariffs on goods from countries around the world, significantly escalating U.S. trade policy.

The order introduces a tiered system of tariffs, with a “universal” 10% rate applying to most countries where the U.S. runs a trade surplus and a 15% minimum rate for about 40 nations with which the U.S. runs a trade deficit. Some countries, such as Canada, face even higher rates—up to 35%. Depending on trade imbalances, certain nations could see tariffs as high as 41%. The tariffs were originally expected to take effect on August 1, but have been pushed to August 7 to allow for administrative finalization and continued negotiations.

Negotiations with major trade partners like China and Mexico are still in progress, so their final tariff rates have not yet been determined.

The Kentucky Chamber, along with state and federal elected officials from the Commonwealth, have voiced concerns about the harmful impact of tariffs on the business community.

“A trade war is not the way to economic prosperity,” said Kentucky Chamber President and CEO Ashli Watts. “These broad national policies have a very local impact for our businesses and Kentuckians.”

Kentucky’s economy is closely tied to global markets, particularly in automotive manufacturing, aerospace, agriculture, and spirits. The Commonwealth reported $47 billion in exports in 2024 and nearly twice that amount in imports, making it one of the most trade-dependent states in the nation.

Tariffs on inputs and finished goods can impact costs throughout the supply chain. The new policy affects key trading partners such as Canada, Mexico, China, and the European Union, which account for a significant share of Kentucky’s exports and imports.

The Chamber is actively monitoring how the new tariffs are impacting Kentucky’s economy. In June, the Chamber hosted a webinar with the Tax Foundation to explore the broader economic consequences of tariff policy. Economists from the organization noted that the tariffs announced to date represent the largest federal tax increase on businesses and consumers since the 1990s.

Read more and watch the full webinar at kychamber.com/economy.