The United States’ tariff policy implemented on July 24 has shifted from a unified tariff policy to a system of different taxation for different countries. Despite relatively modest changes in the average tariff rates across countries, there have been distinct adjustments made by different nations. China remains the country with the highest tariffs, while Brazil has seen a significant increase in its tariffs.
According to the independent trade monitoring institution, Global Trade Alert, a recent analysis discusses the changes in tariff policies and their specific impacts on certain countries. The analysis indicates that while the average U.S. tariff calculated by trade volume has only marginally increased from 11.0% to 11.2%, the fundamental shift in the tariff system is evident in the move from nearly uniform additional tariffs applicable to all countries to differential tariffs imposed on a country-by-country basis.
During the period of the 122nd additional tariff provision, countries had almost identical treatment in the U.S. market. However, with the new tariff regime, there is now a noticeable disparity in relative competitiveness among countries in the U.S. market.
Overall, China remains the country with the highest tariffs under the new policy, with the average effective tariff increasing from 26.3% to 27.2%, representing a rise of approximately 0.9%. The high tariffs in China are attributed to a combination of factors, including the 301 tariffs implemented since 2018, tariffs related to fentanyl, certain products subject to the 232 tariffs (such as steel, aluminum), and the newly implemented “forced labor” tariff framework on July 24.
Analysis suggests that Brazil is the country most significantly impacted by the new tariff measures. This is linked to three major changes in the U.S. between July 22 and 24.
These changes include the official enforcement of the 301 tariffs specific to Brazil on July 22, the expiration of the 10% temporary additional tariff under the 122nd provision on July 24, and the initiation of the new 301 tariff concerning goods involving forced labor for around 60 economies on July 24.
Brazil’s original tariff was only 11%, but with the introduction of the exclusive 301 tariff for Brazil on July 22 and the new 301 framework on July 24, the tariff surged to 17.7%.
Regarding Brazil’s specific 301 tariff, it does not entail a blanket 25% increase on all Brazilian products but rather imposes an additional 25% tariff on certain Brazilian imports (with exemptions for some goods). This measure stems from a formal trade sanction taken by the U.S. following a year-long investigation in accordance with Section 301 of the Trade Act of 1974.
The Office of the U.S. Trade Representative (USTR) identified six main issues, deeming Brazil’s policies “unreasonable and burdensome or restrictive to American commerce.”
These issues include digital trade and electronic payment services, unfair and preferential tariff systems, deficiencies in anti-corruption law enforcement, inadequate intellectual property protection, restrictions on ethanol market access, and ineffective measures against illegal deforestation.
With the elimination of the 10% temporary additional tariff, European countries emerge as the relative winners in this adjustment. Countries like France, the UK, Germany, and Spain have seen a decrease in their actual tariff rates. Belgium, Spain, and Italy have benefited the most from the reduction, with effective tariffs dropping by about 1 to 1.5 percentage points.
The differing directions in tariff adjustments among countries result from two main factors. Firstly, goods subject to the 232 tariffs on steel, aluminum, automobiles, and related products never fell under the 122nd additional tariff provision. Thus, countries focusing on the export of these goods had few 10% additional tariffs to forego.
For example, around 23% of Germany’s exports to the U.S. consist of automobiles and components. Consequently, the removal of the 122nd provision had limited benefits for Germany.
Secondly, civilian aircraft are simultaneously exempted from the 122nd provision and the new forced labor 301 tariff. Thus, countries heavily reliant on aircraft exports experienced minimal impact from the two adjustments.
France exports civilian aircraft to the U.S., so the average tariff only decreased by approximately 0.85 percentage points.
Global Trade Alert suggests that the different structures of national export commodities, coupled with varying exemption arrangements, have reintroduced competitiveness disparities among export countries that were formerly subject to almost identical treatment. Vietnam is facing higher U.S. tariffs than its competitors, posing a risk to the competitiveness of its garment industry.
Since 2025, Vietnam has surpassed China to become the largest supplier of ready-made garments to the U.S. However, the U.S. has imposed a 12.5% tariff on Vietnam, akin to China, citing insufficient enforcement of anti-forced labor regulations. In comparison, Bangladesh, Cambodia, Indonesia, and Malaysia face a 10% tariff.
In the textile industry, the U.S. government proposed the “Textile Mechanism” for the first time in the Federal Register on July 24. Bangladesh, Cambodia, Indonesia, and Malaysia are the only countries included in this new mechanism. This mechanism may potentially exempt some of their clothing exports to the U.S. from the new tariffs.
The mechanism is scheduled for formal establishment when feasible and planned for a three-year implementation period. Its objective is to encourage countries to increase the purchase of American cotton and textile materials.
Eligible countries may enjoy additional tariff reductions through a quota system based on the quantities of American cotton and textile materials they procure, potentially reducing tariffs to zero. Consequently, Vietnam’s extensive ready-made garment export industry faces a double blow.
Furthermore, EU member states benefit from the forced labor tariff system and exemption arrangements aligned with their export structures, resulting in improved competitiveness. Meanwhile, Brazil’s competitiveness sharply declined from near-average levels to a negative 7.5 percentage points, indicating a significant loss in competitiveness. On the other hand, Canada and Mexico continue to leverage the advantages of the United States-Mexico-Canada Agreement (USMCA), while China remains the weakest exporter in terms of competitiveness. The USMCA is a trilateral free trade agreement that officially took effect on July 1, 2020.
Global Trade Alert concludes that the current tariff landscape is increasingly resembling the era before the February 2026 Supreme Court ruling, known as the “reciprocal tariff” period, where different countries were subject to varying tariff rates.