The U.S. on Thursday enacted sweeping tariffs on dozens of its trading partners, elevating the average effective import duty to approximately 17?percent – a level not seen in decades – and sparking concerns about a potential global recession and increased price pressures on American consumers.
This is "a dark day in the annals of global trade integration, which was once seen as having so much promise in bringing countries together around a vision of shared prosperity," Eswar Prasad, a professor of trade policy in the Dyson School at Cornell University, told the New York Times.
"(U.S. President Donald) Trump has decisively and irrevocably taken the hammer to the global rules-based trading system, breaking it apart in a way that is going to be difficult to put together again for a long time to come," Prasad said.
The new duties, though overall reduced from those Trump announced on April 1 but delayed due to widespread resistance, remain strikingly high. They range from the 10 percent baseline to 50 percent, with India and Brazil facing the highest rates, Canada 35 percent and Switzerland 39 percent.
These tariff hikes reflect aggressive measures introduced between July and August, markedly increasing costs for imported goods. According to Yale University's Budget Lab, before consumer substitution sets in, the effective U.S. tariff rate reached as much as 18.3 percent, the highest since 1934, and when accounting for shifts in purchasing behavior, the post-substitution rate still stands at 17.3 percent, a level not witnessed since 1935.
These sharp increases have led to a steep short-term rise in consumer prices – about 1.8?percent – translating to an income-equivalent loss of roughly $2,400 per household in 2025, it said.
Analysts anticipate broader macroeconomic repercussions. Bloomberg economist Maeva Cousin said last week that the new tariff rates would cause the average U.S. tariff to soar from 2.3 percent in 2024 to 15.2 percent.
As a result, U.S. gross domestic product (GDP) is expected to decline by 1.8 percent, while core inflation is projected to rise by 1.1 percent over the next two to three years, Cousin said in a report.
The tariffs will deal a significant blow to global GDP, she said, adding that for the U.S.' trading partners, higher tariffs pose downside risks to demand, putting simultaneous pressure on both economic activity and inflation.
The August 7 tariff enactment came after countries raced to strike deals with the U.S. to avert steep tariffs. While some secured lower rates under last-minute accords, others, including India, South Africa and Brazil, were hit with some of the highest levies.
For those facing punitive tariffs, defiance is the prevailing response. India's foreign ministry on Thursday condemned the tariffs as "unfair, unjustified and unreasonable," accusing Washington of double standards. Brazilian President Luiz Inacio Lula da Silva told Reuters he would not "humiliate" himself by calling Trump.
Across the Atlantic, European leaders have condemned the trade agreement that Brussels secured with Washington as fundamentally unbalanced. French Prime Minister Francois Bayrou denounced the deal as a "dark day" for Europe, accusing the EU of capitulating to U.S. demands. Clement Beaune, France's high commissioner for strategy and planning, described the agreement as "unequal and unbalanced," asserting that Europe failed to use its economic strength in the face of pressure.
The surge in U.S. tariff rates and the pointed criticism from many of the U.S.' trading partners mark a pivotal escalation in global trade tensions. With households facing higher prices and economists warning of slowed growth, August 7, 2025, stands out as a defining moment in recent trade history – but one fraught with uncertainty and growing friction.