More countries and trading blocs have managed to conclude new trade deals, although the future of UK steel products is still not clear.
President Trump extended the original 9 July 2025 deadline to 1 August 2025. This too has passed and there are still trade deals outstanding. If no trade deal is concluded or no application to extend the deadline is made, many importers will face large increases on the prices of goods entering the USA.
Most LATAM countries are likely to have a 10% tariff rate, but some may be hit with country specific tariffs of 15% (Guyana), 38% (Venezuela) and 50% Brazil with additional tariffs of between 20% and 100% for specific products, based on the country of origin. The highest tariff rate could be 150%!
Mexico is in a free trading bloc with Canada and the USA, (“USMCA”) but still faces 25% tariffs on anything not covered by the USMCA deal (which is about half of its exports to the US). In addition, exports of automotive goods, aluminium, steel, beer and empty aluminium cans would face an additional 25% tariff.
The USA determines origin based on preferential and non-preferential rules of origin. For preferential rules of origin (where there is a trade deal in place) it is possible to import items from, say the UK, that have been substantially transformed from goods from a non-preferential trade partner such as a far eastern country and have the lower tariff applied.
Alternatively, where the non-preferential goods form a small part of the goods, the non-preferential goods are ignored. Therefore, it could be possible to import raw materials (e.g. cloth, steel, aluminium) into another LATAM country (other than Guyana, Mexico, Brazil and Venezuela) and transform them into other goods such as clothing, screws or tin cans and the preferential rate for the LATAM country (10%) would apply.
For example, sheet aluminium from Brazil could be imported into Columbia (import duty 0% currently). It could then be made into cans and shipped to the USA at the general Brazilian 10% duty rate because it has undergone substantial transformation. The general rate for Mexico for non-USMCA goods if there is no extension to the tariff holiday or no trade deal is 50%, so aluminium cans shipped from Mexico to USA directly would cost 40% more in terms of duty.
Hillier Hopkins LLP has the expertise to advise on this and to optimise supply chains. Please contact Ruth Corkin at ruth.corkin@hhllp.co.uk for more information.
