The move by U.S. President Donald Trump to apply a uniform tariff to all imported goods of 15% is a major reset of the U.S. trade policy. Effective February 24, the measure replaces a mix of negotiated rates and product-specific exemptions with a flat structure that alters relative advantages among major trading partners.

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Data compiled by Global Trade Alert indicate that the tariff overhaul will reduce average duty rates for some large exporters while raising them for several traditional U.S. allies. The changes are expected to reshape cost structures across sectors and geographies.

Brazil And China See Largest Tariff Reductions

Under the new system, Brazil will experience the highest reduction in the average tariff rates, as the obligations will reduce by 13.6% points. This decrease acts as an indication of the change in the previous levels of higher rates to a similar level of 15% structure.

The lower average tariff burden will also favor China, whereby the rates will fall by 7.1% points. The adjustment will reduce the difference between the previous tariff exposure of China and the newly introduced value-free tariff, which could positively affect the competitiveness of prices of Chinese products in the U.S. market.

U.S. Allies Face Higher Effective Tariff Burden

In contrast, several longstanding U.S. allies are expected to face higher overall tariff exposure. The UK, which had secured a 10% tariff rate on many goods under prior arrangements, will see its average tariff rate rise by 2.1% points under the 15% uniform system.

The European Union will experience an overall 0.8% point increase in its average tariff rate once nearly 1,100 previously exempt product categories are factored into the calculations. Italy and France are some of the most vulnerable in the bloc because of the makeup of their export baskets and the inclusion of goods that were previously exempt.

Japan is also positioned to face elevated costs. Its exports to the U.S. are concentrated in automobiles, auto components, steel, and aluminium. 

Shift In Supply Chains And Sectoral Exposure

The revision of the tariff regime in terms of structure impacts differently on countries differently, depending on their export composition. The Asian manufacturing centres like Vietnam, Thailand, and Malaysia are in a position to enjoy the tariff reset. They have an export mix, which is composed mainly of labour-intensive goods such as clothing, furniture, toys, and plastics, which will benefit from a levelled-out rate.

The standardised tariff system changes the relative cost patterns between sectors and regions, and in trade and supply chains, means that exporters will adapt to the new U.S. import system.