Key Takeaways
-
New tariff rates on dozens of countries.
-
Federal Circuit judges question presidential tariff powers.
-
Customs de minimis gets more minimis.
-
Build in America backfires on Ford.
-
Rebates receive cool GOP reception.
-
National Homemade Pie Day, National Play Ball Day.
Trump Boosts Tariffs Across World, Reshaping Global Commerce - Catherine Lucey and Josh Wingrove, Bloomberg via MSN:
Taken together, the average US tariff rate will rise to 15.2% if rates are implemented as announced, according to Bloomberg Economics. That’s up from 13.3% earlier and significantly higher than the 2.3% in 2024 before Trump took office.
White House Unveils New Tariffs On Dozens Of Countries - Hailey Konnath, Law360 Tax Authority ($):
In a fact sheet issued alongside the executive order, the White House said the "decisive action" resets "decades of failed trade policy."
Among countries facing the highest tariff rates are Syria, which has been assigned a 41% tariff, and Laos and Myanmar, both of which will be subject to a 40% tariff, according to the executive order. South Africa, Libya, Bosnia and Algeria will all face rates of 30%, the order states. Meanwhile, Brazil, the Falkland Islands and the United Kingdom are looking at tariffs of 10%, the lowest rate on the president's list.
Link: White House Fact Sheet
Donald Trump reignites global trade war with sweeping tariff regime - Aime Williams and Kathrin Hille, Financial Times:
Crucial exporters to the US such as Taiwan, the world’s most important semiconductor exporter, will incur steep new levies. Trump also raised tariffs on Canada, an ally and major trading partner, to 35 per cent. India was hit with a rate of 25 per cent and Switzerland with 39 per cent.
Trump’s Tariffs: Where He Started, What He Threatened, Where He Ended Up - Chao Deng and Drew An-Pham, Wall Street Journal. "A roundup of where things stand with tariffs on key U.S. trade partners and sectors."
Tariffs Show Up For Court
The Rough Day in Court for Trump’s Tariffs - Jess Bravin and Louise Radnofsky, Wall Street Journal:
The oral argument touched on key questions in the dispute: Do chronic problems like the trade imbalance and cross-border drug smuggling qualify as emergencies allowing the president to set aside normal laws? Do federal courts have the power to review the president’s emergency determinations? And does the International Emergency Economic Powers Act, the 1977 law known as Ieepa that Trump invoked, allow the president to impose tariffs at all?
Fed. Circ. Judges Cast Doubts On Trump Tariff Powers - Dylan Moroses, Law360 Tax Authority ($):
"It's a wholesale revision of the scheme that Congress enacted in the Harmonized Tariff Schedule," Judge Dyk said. "It's just hard for me to see that Congress intended to give the president in IEEPA the wholesale authority to throw out the tariff schedule that Congress adopted after years of careful work and revise every one of these tariff rates."
Trump Tariff Power at Risk After Skepticism by Appeals Court - Erik Larson and Zoe Tillman, Bloomberg via MSN:
...
Thursday’s hearing was held before the Federal Circuit’s entire slate of 11 active judges instead of a typical three-judge panel, meaning the ruling can immediately be appealed to the Supreme Court. Three of the judges were appointed by Republican presidents and eight by Democrats.
Liberation Day II consequences
U.S. Suspends De Minimis Shipping Exemption - Michael Smith, Tax Notes ($). "According to a July 30 White House fact sheet, the specified duty levied on shipments will vary from $80 to $200 per item, depending on the tariff rate placed on the country of origin. However, the fact sheet said that other exemptions will remain in place. American travelers returning to the United States can bring up to $200 in personal items and receive gifts valued at $100 or less duty free."
Why Ford’s Made-in-America Strategy Hurts It in Trump’s Trade War - Sharon Terlep, Wall Street Journal:
But the Dearborn, Mich., company said the Trump administration’s latest trade deals with Japan, the European Union and South Korea put it at a disadvantage with foreign rivals. Those deals now set a 15% tariff rate, which is lower than the 25% auto tariff that went into effect this spring.
Ford faces steeper tariffs on many parts as well as higher costs for imported aluminum, which is subject to 50% duties. Ford, one of the industry’s biggest users of aluminum, buys the material from U.S. suppliers who pass on a chunk of their tariff costs.
Switzerland in ‘shock’ at 39% US tariff blow - Mercedes Ruehl, Financial Times:
Swiss citizens and its key pharmaceutical industry woke to news on the country’s national day that its new duty rate was only marginally lower than the countries with the steepest tariffs, including Brazil, Syria, Laos and Myanmar. Switzerland’s new rate is even higher than the 31 per cent outlined by the US president on “liberation day” in April.
In a Country Trump Says Nobody’s Heard Of, Tariffs Bring Chaos - Alexandra Wexler, Wall Street Journal:
Trump, who publicly disparaged Lesotho as a place “nobody has ever heard of,” threatened the tiny southern African country with 50% tariffs, among the highest rates proposed for any single nation or territory. The Trump administration ultimately set a 15% tariff on Lesotho late Thursday, but much damage has already occurred to the country’s textile industry. It is uncertain how many buyers will return, leaving thousands of workers in limbo.
Meanwhile in Congress
GOP senators reject Trump’s pitch to use tariff revenue for ‘rebates’ - Riley Beggin, Washington Post:
...
But most Republican senators said the first priority should be digging out of debt.
“We’re $37 trillion in debt. We’re running deficits close to $2 trillion. I wouldn’t support it,” Sen. Ron Johnson (R-Wisconsin) said. “At some point in time, this madness has to end.”
The Vault: Republicans icy to tariff checks - Laura Weiss, Punchbowl News:
So the GOP mood could shift if Trump makes a bigger push for rebate checks. Sen. Josh Hawley (R-Mo.) already backed up Trump’s idea with a bill for checks of $600 or more. But the push isn’t going anywhere for now.
There's Always a Tax Angle, Epstein Files Department.
Wyden Questions IRS on Jeffrey Epstein’s Tax Planning Services - Cady Stanton, Tax Notes ($):
Senate Finance Committee ranking member Ron Wyden, D-Ore., wrote to IRS Commissioner Billy Long in a July 31 letter arguing that the agency failed to investigate alleged tax planning work performed by Epstein on behalf of billionaire Leon Black.
...
“Epstein lacked any professional training or certifications in accounting or tax law, yet was chosen by very wealthy people to execute very complex tax-related financial transactions,” Wyden wrote in the letter. “Despite this glaring lack of qualifications that might lead anyone to double check Epstein’s work, it appears that the IRS failed over the course of many years to audit major tax transactions involving Epstein.”
Epstein’s Work for Leon Black Should Face IRS Probe, Wyden Says - David Voreacos and Chris Strohm, Bloomberg via MSN. "Ron Wyden, the Senate Finance Committee’s top Democrat, wrote Thursday to IRS Commissioner Billy Long to question why the agency had not audited at least $158 million in payments that Black made to Epstein between 2012 and 2017 for complex tax-related transactions."
More Regulation Trimming in Store?
Book-Tax, Double-Dipping Rules Among Top Candidates for Rollback - Michael Rapoort, Bloomberg ($):
...
Also under fire is a provision in the proposed regulations on the 1% excise tax on companies’ stock repurchases. The regulations’ “funding rule” would impose the tax on foreign companies’ buybacks if they’re indirectly funded by the companies’ US subsidiaries for the “principal purpose” of avoiding the tax.
Business advocates contend the funding rule would levy the buyback tax on many routine transactions that have nothing to do with buybacks.
Related: Eide Bailly International Tax Services.
Blogs and Bits
Tax season 2026 to start in mid-February, without Direct File - Kay Bell, Don't Mess With Taxes. "Word is that it will begin around Presidents Day, which falls on Monday, Feb. 16, 2026. Since that’s a federal holiday, the IRS won’t begin accepting and processing individual 1040 forms until the next business day, Tuesday, Feb. 17, 2026."
A Mid-Year Tax Review: 7 Steps To Maximize Tax Savings For 2025 - Cindy McGhee, Forbes. "This halfway point in the calendar year is an ideal moment to course-correct. Whether you’ve experienced major life events—like a new job, marriage, a home purchase, or the birth of a child—or simply seen shifts in income or expenses, a mid-year tax review ensures your tax strategy reflects your current reality."
Could Earmarking Taxes Help Reduce the Federal Deficit? - Imari Stewart, Ian Berlin, and William Gale, TaxVox. "Although tax increases are often unpopular, two strategies could help legislators make the case: earmarking taxes for specific programs and, more generally, reframing the tax discussion to focus on the popular services that taxes fund."
How the One Big Beautiful Bill Changes Green Energy Tax Credits - Alex Muresianu, Tax Policy Blog. "The changes to the IRA tax credits can be split into three categories: straightforward repeals to mostly consumer-focused credits related to electric vehicles and buildings, more complex phaseouts and restrictions for power generation and other business-related credits, and expansions to the clean fuel and carbon oxide sequestration credits."
Learn more about these issues in the Eide Bailly Webinar New Tax Legislation: Impacts on Energy Incentives slated for next Tuesday at 11:00 a.m. Central. Register today!
What day is it?
August starts with National Homemade Pie Day and National Play Ball Day. A good homemade pie is a home run in my book.
We're Here to Help
