Tariffs Briefing VII
AUG 7, 2025 - STRATEGIC TRADE SHIFTS & GEORGIA’S OUTLOOK
GEORGIA CHAMBER OF COMMERCE
Executive Summary
Over the past three weeks, the U.S. has reached key trade and tariff deals with Japan, South Korea, the European Union, and other significant trade partners including Indonesia, Vietnam, and the Philippines. These agreements aim to reset trade balances by setting baseline U.S. tariffs (mostly around 15%) while opening new markets and securing large foreign investment commitments in U.S. industries.
This Georgia Chamber Foundation briefing highlights the major deals, their terms, and what they mean for Georgia, especially for agriculture, steel, autos, aerospace/defense, and service industry.
U.S.-Japan Trade & Investment Agreement: Avoids steep tariffs (up to 27.5%) in exchange for a $550 billion Japanese investment pledge in “core American industries,” and expanded purchases of U.S. goods. Some political pushback in Japan may lead to revisions.
U.S.-EU Tariff Deal: Sets a 15% U.S. tariff on most EU imports (steel/aluminum stay at 50%) and averts escalation. In return, the EU commits to eliminating tariffs on U.S. goods and investing $600 billion in the U.S. by 2028 and increasing its U.S. energy purchases.
Canada: Tariffs have been increased from 25% to 35%. Goods qualifying for preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA) continue to remain not subject to the IEEPA Canada tariffs.
Mexico: Tariffs have been delayed for 90 days as negotiations continue.
Other Recent Announcements: Agreements with Indonesia, Vietnam, and the Philippines keep U.S. tariffs at moderate levels (19–20%) in return for reduced trade barriers and major U.S. export commitments. Talks with China are ongoing, with tariff increases on hold for now.
What It Means for Georgia
These deals open the door for more exports of Georgia’s farm goods, cars, and aircraft, while creating opportunities for foreign investment. But higher import tariffs may raise costs for local manufacturers that rely on overseas steel and parts. The full report details the potential gains and challenges across Georgia’s key industries.
*Trade and tariff information in this briefing is updated as of Wednesday, August 6th at 4p.m.
Overview of Recent Trade Deals
U.S.–JAPAN STRATEGIC TRADE AND INVESTMENT AGREEMENT
ANNOUNCED ON JULY 23, 2025
The U.S. and Japan agreed to a landmark trade and investment deal that reduces threatened U.S. tariffs to a 15% baseline, down from as high as 27.5%, in exchange for major Japanese commitments:
Investment: Japan may invest up to $550 billion in U.S. industries, though details may shift due to domestic politics.
Market Access for U.S. Exports: Japan will significantly increase purchases of U.S. agricultural goods (rice, corn, soybeans, and more), energy (including a potential Alaskan LNG deal), and aerospace/defense (e.g., 100 Boeing planes and $17B in annual defense spending).
Automotive Breakthrough: U.S. vehicles can now be sold in Japan under U.S. safety standards, and Japan will remove long-standing non-tariff trade barriers.
Note: Tariffs on Japanese steel and aluminum remain at 50% pending further negotiation.
U.S.–EU TRADE AGREEMENT
ANNOUNCED JULY 28, 2025
This deal overhauls U.S.–EU trade rules, avoiding a tariff war and boosting transatlantic economic cooperation:
Tariff Restructuring: A uniform 15% U.S. tariff now applies to most EU goods (including cars), while steel, aluminum, and copper remain at 50%.
EU Concessions: The EU will eliminate tariffs on U.S. industrial exports and ease ac cess for U.S. agriculture by reducing non-tariff trade barriers. It also ends the duty-free treatment of EU pharmaceuticals.
Energy & Investment: The EU will import $750 billion in U.S. energy and invest $600 billion in the U.S. by 2028.
Digital & Defense Cooperation: Both sides pledged to maintain duty-free digital trade, avoid new network fees, and expand defense equipment purchases.
Note: Tariffs on alcoholic beverages remain under negotiation.
OTHER NOTABLE TRADE DEVELOPMENTS
Transshipment: Any good suspected of transshipment in an effort to avoid duties will face a 40% tariff.
Indonesia: The U.S. will impose a 19% tariff (down from a threatened 32%) in exchange for Indonesia removing 99% of tariffs on U.S. goods and lifting export bans on key minerals.
Vietnam: A 20% U.S. tariff applies to verified Vietnamese exports, with a 40% rate for products linked to China. Vietnam will drop many tariffs on U.S. cars, agriculture, Liquified Natural Gas, and other goods and increase Boeing purchases.
Philippines: A 19% U.S. tariff was set, while the Philippines agreed to zero tariffs on U.S. vehicles and increased imports of U.S. agricultural products and pharmaceuticals.
United Kingdom: A framework deal from May, avoids further escalation. Final terms are still being developed, but the UK is expected to receive a similar 10% baseline tariff as the EU.
Switzerland: Switzerland faces 39% duties on its goods imported into the U.S., one of the highest new tariff rates under the Administration.
China: Talks resumed in late July with a 90-day pause on new tariffs set to expire August 12. Any progress or breakdown will have major implications for Georgia, especially in agriculture and manufacturing sectors.
India: An additional 25% levy has been placed on the nation, bringing the tariff to 50%.
Implications for Georgia’s Economy and Key Sectors
In 2024, Georgia’s total global trade was worth $198.7 billion and exported a record $53.1 billion in goods, a fourth year of record growth. Top exports include civilian aircraft and ancillary parts, as well as motor vehicles. These new deals could boost exports in agriculture, aerospace, and automobiles while raising costs for some manufacturers and consumers. Below is a sector-by-sector snapshot of what these deals may mean for Georgia.
Agriculture and Agribusiness
UPSIDE
Expanded Markets: Japan’s pledge to increase U.S. farm imports, including rice, soybeans, and corn, could indirectly boost demand and prices for Georgia crops.
Competitive Edge: U.S. deals with Japan and Vietnam may give Georgia farmers an edge over global rivals like Brazil, especially for exports through Savannah.
CHALLENGES
Poultry: Georgia’s poultry industry is the largest in the U.S. and the seventh largest in the world. Uncertainty regarding tariffs poses significant risks for the industry as exports could decrease, leading to decreased production and potential job losses.
EU Market Still Tight: No major relief on EU agricultural tariffs means products like Georgia peanuts and cotton remain constrained.
No Progress with China: China remains a key market, but no new agreement yet. That limits growth for some of Georgia’s top exports.
Rising Import Costs: Tariffs on EU foods and agricultural machinery could raise prices for Georgia grocers and agribusinesses.
BOTTOM LINE
Tariffs pose significant challenges ahead with tremendous barriers remaining in place, especially in Europe and China.
Steel and Aluminum
UPSIDE
Protection for U.S. Metals: Continued 50% tariffs on foreign metals may help Georgia’s recyclers and metal producers by limiting cheap imports.
New Investment Potential: Japan’s $550 billion investment plan could support U.S. shipbuilding and metals, possibly creating downstream opportunities for Georgia logistics and manufacturers.
CHALLENGES
Higher Input Costs: Georgia manufacturers using specialty steel or aluminum will likely face higher costs.
Lingering EU Tensions: Unresolved disputes could invite future EU retaliation that affects Georgia-made goods.
Supply Chain Disruption: Shifting away from Europe/Japan sources may require procurement changes for Georgia manufacturers.
BOTTOM LINE
Tariffs protect a few local producers but increase costs for many more Georgia-based manufacturers.
Automotive Industry
UPSIDE
Home Field Advantage: A 15% tariff on foreign-made cars boosts demand for U.S.-built vehicles, including those made in Georgia.
New Export Markets: Japan and Southeast Asian countries removing trade barriers opens the door to export Georgia-made cars and parts.
Port of Brunswick Growth: More exports and parts imports could drive more volume through Georgia’s auto shipping hub. It was announced this year that Colonel’s Island Terminal in Brunswick has become the nation’s busiest port for autos and heavy equipment, handling more than 2 million tons of Roll-on/Roll-off cargo over the last year.
CHALLENGES
Imported Parts Are Pricier: Auto plants here that use European or Japanese parts may face higher costs.
Lingering Uncertainty: As trade terms remain unsettled in a few key markets, investment and export decisions could be impacted.
BOTTOM LINE
Georgia’s auto industry stands to gain from reshored production and new market access, but must manage rising input costs.
Aerospace and Defense
UPSIDE
More Global Sales: Japan’s order of 100 Boeing planes and similar deals with Vietnam and the EU support Georgia’s top export – civilian aircraft and parts.
Defense Spending Surge: Japan and the EU are boosting military purchases from U.S. firms, potentially benefiting Georgia contractors like Lockheed Martin.
Zero EU Tariffs: Aerospace goods now enter Europe tariff-free, giving Georgia suppliers a competitive edge.
CHALLENGES
Higher Import Costs: Some aerospace parts still come from Europe/Japan, now at risk of higher tariffs.
No Guarantee on EU Civil Aviation Buys: Europe will still favor Airbus, limiting gains unless U.S. products offer a clear cost or tech edge.
BOTTOM LINE
Aerospace and defense are big winners; these deals expand export markets and likely mean more contracts and jobs in Georgia.
Services and Other Sectors
UPSIDE
Port & Logistics Boost: More goods in motion means more work for Georgia’s ports, trucking, and warehousing sectors.
Digital Trade Protections: The EU pledged not to impose extra fees on U.S. digital services, helping Georgia’s tech, media, and fintech firms.
Tourism and Education Gains: Better global relations often bring more travel, exchange programs, and foreign investment, which is good news for Atlanta’s airport, colleges, and tourism.
CHALLENGES
Higher Prices for Imports: Tariffs on cars, electronics, food, and more could drive up consumer prices in Georgia.
Policy Whiplash: Small businesses may struggle to navigate the sudden shift in trade rules and tariffs without expert help.
BOTTOM LINE
Georgia’s service economy benefits from stronger global ties but needs support to manage the fast-changing trade landscape.
Conclusion and Outlook
Recent trade agreements mark a major reset in U.S. global trade policy. Georgia is well-positioned to benefit from expanded export markets, increased foreign investment, and stronger trade partnerships.
But the continuation of high tariffs means higher costs for many import-reliant companies. Key parts of the EU agreement still need to be finalized, and talks with China could either improve or disrupt current progress. Businesses crave stability, and the current unpredictability poses significant challenges for the business community.
The Georgia Chamber Foundation will continue tracking these agreements as they move toward implementation. We encourage members to stay connected through our Global Business Subcommittee and to collaborate with state trade partners like the Georgia Department of Economic Development. Engagement and feedback help ensure we can advocate for Georgia’s interests as global trade rules evolve.
BOTTOM LINE
Georgia’s diverse, globally engaged economy is well equipped to succeed under the new trade landscape if we stay informed, flexible, and proactive.
Source Note: This report draws from official White House fact sheets and major news outlets, including Reuters and the Wall Street Journal, and the Georgia Department of Economic Development’s 2024 trade report. Members can consult these for further details. We’ll continue to share timely updates as new trade developments emerge.