President Donald Trump’s evolving trade policy is set to sharply increase the United States’ effective tariff rate (ETR), with Fitch Ratings warning of substantial rises as new duties take effect on August 1.

The increases reflect broader policy shifts, including reciprocal tariffs and commodity-specific levies that mark a departure from previous administration approaches.

According to Fitch Ratings, “the US ETR will jump to 19.4% from 14.1% on the basis that higher reciprocal tariffs and copper duties come into force on August 1, 2025, in line with the rates specified in recent letters and announced deals.”

The Trump administration has signalled that further duties may follow, including tariffs on semiconductors, electronic derivatives, and pharmaceuticals, pending the outcome of ongoing Section 232 investigations. “The ETR Monitor contains a scenario for an additional 25% tariff on these imports, which would further increase the total ETR to approximately 23.7% from 19.4%,” Fitch noted.

In April, Trump extended a pause on country-specific reciprocal tariffs, but recent letters sent to trading partners have proposed new rates ranging from 25% to 50%. For most countries that have not received specific letters, a 10% baseline tariff remains in place. However, “Trump stated he may set a blanket tariff of 10% to 15% for around 150 countries,” Fitch said, warning that this “presents additional upside risk to current ETR levels.”

New reciprocal agreements have been reached with Vietnam and Indonesia, setting tariff rates of 20% and 19%, respectively. More steeply, Canada and Mexico will face new tariffs of 35% and 30%, raising their ETRs to 11.7% and 13.1%, up from 7.5% and 9.5%. Fitch said these estimates assume “about half of previous tariff-free imports will ultimately be reclassified as USMCA compliant.”

European Union goods are also affected. “Reciprocal tariffs on European Union goods would increase to 30% from 20%,” Fitch said, leading to ETRs across EU member states ranging from around 12% to over 30%. The ETR varies based on changes in product mix and origin of imports.

Bangladesh is projected to face the highest ETR of all US trading partners under the August regime. “The ETR approximates the announced tariff rate as Bangladesh does not benefit from tariff carveouts,” Fitch explained, putting the new rate at around 50% — a combination of a pre-existing 15% and a newly introduced 35% rate.

There are no new changes to tariffs on Chinese goods. “The ETR for China is unchanged at 41.4%,” Fitch said.

Fitch’s updated ETR Monitor provides granular data through 2025, including a sector-by-sector breakdown of duties on imports from top US trading partners such as China, the EU, Japan, Vietnam, Canada, and Mexico. “The tool allows users to assess tariff scenarios by adjusting sector and country rates as well as import amounts,” Fitch said, adding that the monitor will be updated in line with future policy changes.