To avoid or mitigate the impact of Donald Trump’s tariffs, implemented or proposed in 2025, which include a 10% baseline tariff on all imports, up to 125% on Chinese goods, 35% on Canadian goods, 25% on Mexican imports, and reciprocal tariffs ranging from 10% to 50% on dozens of countries, foreign nations are employing a range of strategies. These tariffs, enacted under the International Emergency Economic Powers Act (IEEPA) and other authorities, aim to address trade deficits, protect U.S. industries, and tackle issues like immigration and fentanyl trafficking. Below is an overview of what other countries are doing to avoid or reduce the impact of these tariffs, based on available information and recent developments.

### Strategies Countries Are Using to Avoid Trump’s Tariffs

1. Negotiating Trade Deals and Investment Pledges:

- Why It Works: Trump’s administration has shown willingness to lower or delay tariffs for countries that offer significant concessions, such as increased purchases of U.S. goods or investments in the U.S. economy. These deals align with Trump’s “commercial diplomacy” approach, where tariff relief is exchanged for economic commitments.

- Examples:

- European Union: The EU secured a preliminary trade deal on July 27, 2025, committing to $600 billion in U.S. investments and $750 billion in purchases of American energy, resulting in a reduced tariff rate of 15% (down from a threatened 20-50%). The EU also offered to lower its car import tariffs from 10% to 2.5% and increase purchases of U.S. liquefied natural gas (LNG) and military equipment.[](https://www.nytimes.com/2025/03/13/business/economy/trump-tariff-timeline.html)

- South Korea: South Korea negotiated a deal announced on July 31, 2025, pledging $350 billion in U.S. investments and $100 billion in LNG and energy purchases, securing tariff-free access for its goods.

- Japan: Japan committed to $550 billion in U.S. investments, including purchases of Ford F-150s, to secure a lower tariff rate, though details remain under negotiation.[](https://www.cnn.com/2025/08/06/business/trump-tariffs-in-effect)

- United Kingdom: The UK avoided a threatened 20% tariff, securing a 10% rate by negotiating reductions in its Digital Services Tax (DST), which targets U.S. tech firms, and committing to increased U.S. market access.[](https://www.theguardian.com/us-news/2025/apr/03/donald-trump-global-trade-tariff-rates-by-country-breakdown-asia)[](https://www.theguardian.com/us-news/2025/feb/11/why-is-trump-imposing-tariffs-and-which-countries-will-be-hit-hardest-in-charts)

- Vietnam: On July 2, 2025, Vietnam agreed to a 20% baseline tariff with a 40% penalty for transshipments (goods routed through Vietnam to avoid Chinese tariffs), avoiding harsher rates by committing to trade concessions.[](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/)

- Challenges: These deals are often preliminary and subject to renegotiation, with uncertainty about enforcement. For example, Japan’s negotiators have disputed Trump’s claims about finalized terms.[](https://www.cnn.com/2025/08/06/business/trump-tariffs-in-effect)

2. Leveraging Existing Trade Agreements:

- Why It Works: Countries with existing trade agreements, like the USMCA, can benefit from exemptions for goods meeting specific rules of origin, reducing tariff exposure.

- Examples:

- Canada and Mexico: Goods compliant with USMCA rules (e.g., 75% North American content for vehicles) are exempt from the 35% (Canada) and 25% (Mexico) tariffs, incentivizing regional production. Mexico received a 90-day reprieve from a threatened 35% tariff increase, maintaining current rates for USMCA-compliant goods.[](https://www.bbc.com/news/articles/c5ypxnnyg7jo)[](https://www.cnn.com/2025/08/06/business/trump-tariffs-in-effect)

- Australia: Critical minerals from Australia, unavailable in the U.S., are exempt from the 10% baseline tariff, leveraging Australia’s free trade agreement with the U.S.[](https://www.theguardian.com/us-news/2025/apr/03/donald-trump-global-trade-tariff-rates-by-country-breakdown-asia)

- Challenges: Compliance with USMCA rules requires complex supply chain adjustments, and non-compliant goods still face high tariffs. Canada’s 35% tariff applies to non-USMCA goods, increasing costs for some exporters.[](https://www.bbc.com/news/articles/c5ypxnnyg7jo)

3. Avoiding Retaliation to Secure Tariff Relief:

- Why It Works: Trump’s administration has rewarded countries that refrain from retaliatory tariffs with tariff pauses or reductions, as seen in the 90-day pause announced on April 9, 2025, for 75 countries that did not retaliate.[](https://www.nbcnews.com/business/economy/trump-tariffs-president-announces-90-day-pause-what-to-know-rcna200463)

- Examples:

- Nigeria: Despite a $1.4 billion trade surplus with the U.S., Nigeria avoided retaliation after Trump imposed a 14% tariff on April 2, 2025, maintaining access under the African Growth and Opportunity Act (AGOA) and avoiding harsher penalties.[](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/)

- United Kingdom: The UK chose not to retaliate against U.S. metal tariffs (25% on steel and aluminum) and instead negotiated to reduce its DST, securing a lower 10% tariff rate.[](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/)[](https://www.theguardian.com/us-news/2025/apr/03/donald-trump-global-trade-tariff-rates-by-country-breakdown-asia)

- New Zealand: Facing a 10% tariff, New Zealand’s Prime Minister Christopher Luxon explicitly avoided retaliatory measures, seeking discussions to clarify claims of a 20% tariff on U.S. imports.[](https://www.theguardian.com/us-news/2025/apr/03/donald-trump-global-trade-tariff-rates-by-country-breakdown-asia)

- Challenges: Avoiding retaliation may be politically unpopular domestically, as it can be seen as capitulating to U.S. pressure, and it risks long-term trade imbalances.

4. Rerouting Trade Through Lower-Tariff Countries (Transshipment):

- Why It Works: Countries like China can route goods through nations with lower tariffs (e.g., Vietnam or Taiwan) to avoid high U.S. duties, though Trump has imposed a 40% penalty on transshipments to deter this.[](https://www.nytimes.com/interactive/2025/07/28/business/economy/trump-tariff-tracker.html)

- Examples:

- Vietnam: Vietnam has become a gateway for Chinese goods, with fears that its 20% tariff rate could rise if transshipments are detected. Companies like Shein have used Vietnam to bypass Chinese tariffs, though this is riskier after the de minimis loophole closure.[](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/)[](https://www.theguardian.com/us-news/2025/apr/03/donald-trump-global-trade-tariff-rates-by-country-breakdown-asia)

- Taiwan and Thailand: Both face 20% and 19% tariffs, respectively, and are used as transshipment hubs for Chinese goods, though increased U.S. scrutiny limits this strategy’s effectiveness.[](https://www.cnn.com/2025/08/06/business/trump-tariffs-in-effect)

- Challenges: The U.S. has cracked down on transshipments with steep penalties, and the closure of the de minimis loophole (effective May 2, 2025) eliminates duty-free entry for low-value packages, impacting e-commerce firms like Shein and Temu.[](https://www.theguardian.com/us-news/2025/apr/03/donald-trump-global-trade-tariff-rates-by-country-breakdown-asia)

5. Offering Non-Trade Concessions:

- Why It Works: Trump’s tariffs often target non-trade issues like immigration and fentanyl trafficking, allowing countries to avoid tariffs by addressing these concerns.

- Examples:

- Mexico and Canada: Both countries faced 25% tariffs (later 35% for Canada) tied to immigration and fentanyl flows. Mexico secured a 90-day tariff reprieve by committing to stronger border controls, while Canada negotiated exemptions for USMCA-compliant goods by addressing fentanyl smuggling.[](https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/)[](https://www.bbc.com/news/articles/c5ypxnnyg7jo)

- Colombia: After initially facing 25% tariffs (escalated to 50%) for rejecting U.S. deportation flights, Colombia avoided further escalation by agreeing to immigration concessions.[](https://www.nytimes.com/2025/03/13/business/economy/trump-tariff-timeline.html)

- China: China committed to addressing fentanyl precursor exports in negotiations, temporarily lowering tariffs from a threatened 125% to 30% under a May 2025 agreement, though this expires on August 12, 2025.[](https://www.nytimes.com/interactive/2025/07/28/business/economy/trump-tariff-tracker.html)

- Challenges: Concessions on sensitive issues like immigration or drug policy can face domestic political backlash, and agreements may be temporary or subject to Trump’s shifting demands.

6. Exploiting Sectoral Exemptions:

- Why It Works: Certain goods, like smartphones and some pharmaceuticals, are currently exempt from reciprocal tariffs or subject to separate sectoral reviews, allowing countries to focus exports on these categories.[](https://www.cnn.com/2025/08/06/business/trump-tariffs-in-effect)

- Examples:

- EU: The EU negotiated a 15% tariff on pharmaceutical exports to the U.S., preempting higher proposed rates (up to 250% threatened).[](https://www.cnn.com/2025/08/06/business/trump-tariffs-in-effect)

- China and Taiwan: Smartphone exports remain exempt, benefiting major producers like Apple (via China and Taiwan), though Trump has signaled potential future tariffs.[](https://www.cnn.com/2025/08/06/business/trump-tariffs-in-effect)

- Challenges: Exemptions are temporary and subject to change, with Trump threatening new sectoral tariffs (e.g., semiconductors, pharmaceuticals) as early as August 2025.[](https://www.cnbc.com/2025/04/09/trump-announces-90-day-tariff-pause-for-at-least-some-countries.html)

7. Absorbing Tariff Costs or Restructuring Exports:

- Why It Works: Some countries or firms absorb tariff costs to maintain market access or shift exports to less tariffed goods, minimizing economic disruption.

- Examples:

- China: Chinese firms like Shein have absorbed some tariff costs to remain competitive, though the de minimis closure will force price increases or market exit.[](https://www.theguardian.com/us-news/2025/apr/03/donald-trump-global-trade-tariff-rates-by-country-breakdown-asia)

- Indonesia: Facing a 19% tariff, Indonesia has shifted exports toward exempted goods like certain electronics, though this is limited by U.S. demand.[](https://www.bbc.com/news/articles/cn93e12rypgo)

- Challenges: Absorbing costs reduces profit margins, and restructuring exports requires market research and supply chain adjustments, which may not be feasible for all industries.

8. Pursuing Diplomatic Engagement:

- Why It Works: Direct engagement with Trump or his administration can lead to tariff reductions or delays, as Trump has responded to personal diplomacy and public commitments.

- Examples:

- Italy: Prime Minister Giorgia Meloni met with Trump to negotiate tariff relief, emphasizing Italy’s support for U.S. interests, resulting in a lower 15% EU tariff rate.[](https://www.pbs.org/newshour/politics/trump-advisers-say-more-than-50-countries-have-reached-out-for-tariff-talks-with-white-house)

- Israel: Prime Minister Benjamin Netanyahu discussed tariffs during a White House visit, securing a 17% tariff rate, lower than threatened rates for other allies.[](https://www.pbs.org/newshour/politics/trump-advisers-say-more-than-50-countries-have-reached-out-for-tariff-talks-with-white-house)

- France: President Emmanuel Macron met Trump on February 25, 2025, urging focus on China rather than the EU, contributing to a delayed EU tariff implementation.[](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/)

- Challenges: Diplomatic success depends on aligning with Trump’s priorities, and outcomes are unpredictable due to his volatile policy approach.

### Specific Country Responses and Outcomes

- China: Facing a 125% tariff (escalated from 104% after retaliatory 84% tariffs), China has pursued a mix of retaliation (e.g., 34-84% tariffs on U.S. goods), negotiation (May 2025 deal lowering tariffs to 30%), and transshipment through Vietnam and Taiwan. Beijing also considers currency devaluation and rare earth export restrictions but remains defiant, viewing concessions as weakness.[](https://www.reuters.com/world/trumps-latest-tariffs-loom-set-deepen-global-trade-war-2025-04-09/)[](https://www.nbcnews.com/business/economy/trump-tariffs-president-announces-90-day-pause-what-to-know-rcna200463)

- Canada: Hit with a 35% tariff (up from 25%), Canada has leveraged USMCA exemptions, committed to fentanyl and immigration controls, and threatened but not implemented retaliatory tariffs to avoid escalation.[](https://www.bbc.com/news/articles/c5ypxnnyg7jo)[](https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/)

- Mexico: Facing a 25% tariff, Mexico secured a 90-day reprieve by strengthening border policies and relies on USMCA exemptions for compliant goods.[](https://www.bbc.com/news/articles/c5ypxnnyg7jo)[](https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/)

- EU: The EU negotiated a 15% tariff rate, committed to $600 billion in investments, and lowered car tariffs, while planning retaliatory tariffs on €26 billion of U.S. imports if negotiations fail.[](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/)

- Brazil: Facing a 50% tariff (10% baseline plus 40% for political reasons), Brazil has avoided retaliation to prevent further escalation but faces economic strain due to high rates.[](https://www.theguardian.com/us-news/2025/aug/01/full-list-tariffs-country-rate-donald-trump-executive-order)

- India: Hit with a 25% baseline tariff plus a 25% penalty for Russian oil purchases, India is negotiating investment pledges to reduce rates, avoiding retaliation to maintain U.S. market access.[](https://www.nytimes.com/interactive/2025/07/28/business/economy/trump-tariff-tracker.html)

- Vietnam: Agreed to a 20% tariff with a 40% transshipment penalty, focusing on direct exports and concessions to avoid harsher rates.[](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/)

### Broader Context and Challenges

- Economic Impact: Tariffs have raised U.S. consumer prices (e.g., 2.7% inflation in June 2025) and triggered market volatility, with global growth forecasts downgraded by the IMF and OECD. Countries avoiding tariffs risk domestic economic strain if they absorb costs or lose U.S. market share.[](https://www.bbc.com/news/articles/cn93e12rypgo)

- Retaliation Risks: While avoiding retaliation can secure tariff relief, it risks trade imbalances and domestic political backlash. China’s retaliation has escalated tensions, while Canada and the EU balance retaliation threats with negotiations.[](https://www.aljazeera.com/news/2025/4/3/trumps-tariffs-which-countries-will-hit-back-and-which-likely-wont)

- Uncertainty: Trump’s on-again, off-again tariff approach (e.g., pausing tariffs for 75 countries on April 9, 2025) creates unpredictability, complicating long-term planning for trading partners.[](https://www.nbcnews.com/business/economy/trump-tariffs-president-announces-90-day-pause-what-to-know-rcna200463)

- Legal Challenges: The U.S. Court of International Trade ruled IEEPA tariffs illegal in May 2025, but they remain in effect pending an appeal, adding uncertainty for countries banking on tariff reversals.[](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/)

### Conclusion

Countries are avoiding Trump’s tariffs through a combination of trade negotiations, leveraging existing agreements like the USMCA, refraining from retaliation, rerouting trade, offering non-trade concessions, exploiting sectoral exemptions, absorbing costs, and engaging in diplomacy. Notable successes include the EU, South Korea, and the UK securing lower rates through investment pledges and market access deals, while Canada and Mexico rely on USMCA exemptions and border policy concessions. However, strategies like transshipment face increasing U.S. scrutiny, and retaliation risks escalation, as seen with China. The volatile nature of Trump’s tariff policy, coupled with legal challenges and economic fallout, means countries must remain agile. #TRUMP #usa #china #Tariffs