Friday, July 24th. The US recently imposed a new round of import tariffs ranging from 10% to 12.5% on 60 trading partners, replacing the temporary 10% uniform tariff that expired that day. While the policy has a different legal basis, it hasn't significantly reduced overall trade barriers. The core of market pricing has shifted from "whether the tariff will continue" to "whether the tariff can be long-term, industry-specific, and continuously expanded." Currently, the US dollar index is trading around 101.47, and the yield on the 10-year US Treasury bond is around 4.68%, still near an 18-month high. The tariff news did not immediately trigger widespread risk aversion because the tariff rates largely remain at previous levels, and energy, some food products, aerospace products, fertilizers, and several key raw materials are excluded from the tariff scope. What's truly noteworthy is not the price fluctuations on the first day, but rather the formation of a more stable institutional framework for trade policy. The previous uniform tariff relied on Section 122 of the Trade Act of 1974, with a clearly limited application period. The new tariff, however, shifts to Section 301, citing the lack of sufficient prohibition and enforcement of import restrictions on forced labor products by trading partners. This clause requires investigation, consultation, and hearings, which involves a longer legal process, but once completed, it also provides greater policy continuity and administrative discretion. The U.S. Trade Representative stated that the investigation covered 60 economies, representing 99.4% of total U.S. imports. Economies that had established partial tariff prohibition mechanisms, made institutional commitments, or reached relevant trade arrangements with the U.S. were subject to a 10% tariff rate, while the majority of the remaining economies were subject to 12.5%. Some trading partners adopted a capping mechanism where the most-favored-nation tariff rate plus new tariffs could not exceed 10% or 12.5%. This means the new policy is not simply raising a uniform tariff rate from 10% to 12.5%, but rather establishing a tiered structure with conditional exchanges. The tariff rate difference is only 2.5 percentage points, but it comes with conditions such as import bans, enforcement disclosures, bilateral agreements, and industry exemptions. Tariffs have thus transformed from a border fee tool into a negotiating bargaining chip to push trading partners to adjust their domestic regulatory systems. In terms of total volume, the new tariffs are expected to marginally increase the effective U.S. tariff rate by approximately 0.5 percentage points, because the previous 10% temporary tariff had been in effect for some time, and the new policy is more of a replacement than a reinstatement. Exemptions for a large number of goods also reduce the risk of immediate price increases for energy, food, and key industrial raw materials. However, the limited overall change does not mean that the micro-level impact can be ignored. With the tariff rate changing from temporary to relatively permanent, importers will find it more difficult to continue viewing tariffs as short-term costs. Businesses need to reassess supply contracts, inventory cycles, country of origin arrangements, and end-market prices. Branded companies with strong bargaining power can partially pass on costs, while small and medium-sized importers and low-margin manufacturers are more likely to absorb the impact by cutting profit margins, reducing procurement, or postponing capital expenditures. The market also needs to distinguish between "taxed goods" and "substitute goods." If a certain type of goods has sufficient substitutes, the additional costs may drive procurement shifts; if the supply chain is highly concentrated, tariffs are more likely to enter producer and consumer prices. The resulting inflation will not rise across the board synchronously, but will be concentrated in specific industries with increased price stickiness, making the Federal Reserve face more noise when judging the underlying inflation trend. Section 301 tariffs are only part of the current policy system. The United States is also investigating whether several major trading partners have structural manufacturing overcapacity and has taken or plans to take industry measures in areas such as automobiles and auto parts, aluminum, copper, and timber. This indicates that the policy direction is gradually extending from broad coverage of low tariff rates to high tariff rates in key industries. The pharmaceutical industry is a key window for observation in the next phase. Some patented drugs and related raw materials are slated to face tariffs of up to 100% starting July 31st, but companies that have reached drug pricing agreements with the US government, meet local production conditions, or are protected by trade arrangements may be exempted. Estimates suggest that the actual market size potentially bearing the full 100% tariff is approximately $12 billion annually, while the total US drug imports in 2025 are estimated at approximately $274 billion, indicating a relatively low direct coverage. The impact is likely to be concentrated on smaller pharmaceutical companies and raw material producers. Large pharmaceutical companies, with local factories, pricing agreements, and global capacity allocation capabilities, are more likely to reduce their tax burden; small and medium-sized enterprises (SMEs) may face increased costs, upfront inventory, and cash flow constraints. Generic drugs currently have a two-year grace period, but the US government has proposed imposing a 100% tariff starting in August 2028, followed by further increases in tariff rates. Generic drugs account for approximately 90% of US prescriptions; if the policy is fully implemented, the stability of drug supply and healthcare payment costs will have a more systemic impact than patented drug tariffs.