Donald Trump’s latest approach to tariffs marks a major shift in U.S. trade policy, moving away from a one-size-fits-all strategy to a system of tiered tariffs. Instead of applying uniform duties, the new plan introduces different rates for various countries, based primarily on the size of the U.S. trade deficit with each nation and whether or not those trading partners meet certain conditions.

A baseline tariff of 10% is now applied to nearly all imports from every country. However, for nations with which the U.S. has large trade deficits, the tariff rate rises sharply, with some countries facing rates as high as 41%. For example, imports from Mexico are subject to a 30% tariff, and goods from Canada face a 35% rate, though both countries are shielded from higher duties if trade takes place under the USMCA agreement. Brazil, after a recent increase, faces a 50% tariff on its exports to the U.S. Other countries, including Laos, Myanmar, and Syria, are among those subjected to the highest tariff tiers.

This new system is part of what Trump officials have described as a “new system of trade” intended to restore fairness and address perceived imbalances in trade relationships. The White House says the measures were implemented using emergency powers, citing concerns about long-standing trade deficits and the impact on American manufacturing and economic security.

The administration has also changed rules that previously allowed certain low-value imports to bypass tariffs, closing the so-called “de minimis” exemption. This means nearly all foreign goods entering the U.S., regardless of value, are now subject to tariffs, marking the most significant expansion of trade barriers in over a century.

While these measures aim to boost domestic industries and government revenue, early reports indicate that costs are being shared by U.S. consumers, domestic businesses, and foreign exporters alike.