Analysis by Energy Workforce President Tim Tarpley
We are moving closer and closer to the August 1st tariff deadline, where reciprocal tariffs as high as 50% may be imposed on several countries next week. Included in this list are major trading partners such as Canada, Mexico, Japan, and the EU. President Trump has delayed these “reciprocal tariffs” since April to give his negotiation team more time to hash out deals. So far, the White House has announced trade agreements with the United Kingdom, Vietnam and Indonesia as well as a preliminary deal with China. Although the White House has indicated that it may hold off on tariffs for other countries in which a final trade agreement has not been reached, if it believes the government is negotiating in good faith. Without delay, some of our biggest trading partners may face significant increases in their tariff rates, including 50% on Brazil, 35% on Canada, 30% on the EU and Mexico, and 25% on Japan and South Korea.
The big question on everybody’s mind is whether this deadline will be met or if there will be further delays. The stock market and many economists have been betting on another delay. The White House, eager to maximize pressure on countries, has been sending signals that another delay is not likely. On Sunday, Commerce Secretary Howard Lutnick referred to the date as a “hard deadline” but later seemed to open the door to some extensions by saying, “nothing stops countries from talking to us after August 1st” Treasury Secretary Scott Bessent echoed this sentiment when asked directly about possible extensions “We’ll see what the President wants to do.”
In addition to the Section 301 tariffs, which could cover around 70% of total imports to the US, the Section 232 tariffs on steel and aluminum are also moving forward. While these account for 30% of US imports, they have a significant impact on the OFS sector. They are also likely to survive legal challenges more effectively than the reciprocal tariffs, which could eventually be scaled back or overturned by the courts. Anecdotally, it also appears that these tariffs may be more politically palatable and more likely to receive longstanding support in Congress.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
