President Donald Trump formalized on Thursday the range of high tariff levels and trade agreements that he has announced in recent weeks, the last escalation in his attempt to interrupt and remodel the world economic order.
In a broad executive order, Trump made his agreements officers with prominent commercial partners such as the European Union, Japan, South Korea, the United Kingdom and the Philippines.
Trump told NBC News in an exclusive interview that his door will always be open to convincing offers: “It does not mean that someone does not come in four weeks and says we can make some kind of treatment.”
Trump’s order, which occurred hours before a self -imposed deadline for trade agreements, also establishes unilateral rates for commercial partners who did not reach agreements with him, for example, Israel, Switzerland and Taiwan. The Switzerland rate will be established higher than the previously threatened, with 39%, while Taiwan will establish lower, with 20%.
It is effectively a restart of the world’s commercial relations, one that is apparently designed to benefit the United States with expensive rates that are not seen in almost a century.
Trump believes that imported goods will erase commercial deficits and bring the manufacture back to the United States. He has promoted the $ 125 billion in revenues that have brought their existing import taxes, with hundreds of billions more committed by a handful of countries in the form of investments. However, it has reached the most slow economic growth and the perspective that inflation will be kind.
On Thursday of Trump’s order, he says that the new tasks will not enter into force until August 7.
The products sent by the ship will not be affected by the new tariff rates until October 5. These products should be sent before August 7, but if importers do not take them out of the port or a warehouse for sale, the new rates will not be applied for months. According to the Department of Transportation.
Trump and senior administration officials had insisted this week that there would be no more delays after the deadline of 12:01 am et Friday. In fact, only a few hours before the White House published Thursday’s executive order, the secretary of Commerce Howard Lutnick shouted journalists outside the White House that “there would be no extension” until the deadline.
But on Thursday, Trump agreed with an extension of 90 days in conversations with Mexican president Claudia Sheinbaum. Mexico is the largest individual business partner in the United States. The secretary of the Treasury, Scott Besent, also told CNBC on Thursday morning that he and Trump would discuss an extension of the Chinese rate deadline, which will be presented on August 12. And Lutnick said days ago that countries could continue talking to the Trump administration after the deadline of Friday.
With newly signed tariffs that have no effect immediately, uncertainty is likely to remain for consumers and companies trying to plan during the rest of the year and beyond.
“Some will argue that the highest rates will be compensated for lower uncertainty,” Bank of America analysts wrote in a client note this week when announcing an agreement with the European Union. “And yes, uncertainty could fall in the short term, but we doubt that it disappears.”
An unidentified manufacturer in a Survey of the Federal Reserve of Dallas published this week expressed it without Rodeos: “Rates. Rates. Rates. Did I mention tariffs?”
Inflation and Fed
As the new tariffs keep the economy at the limit for two more months, the Federal Reserve will also try to determine what the effects will be.
On Wednesday, the president of the Fed, Jerome Powell, said that the policy formulators of the Central Bank thought there was still “a long way to really understand” what the effects will be and how the duties will be developed. That could mean that interest rates can remain waiting.
Powell presented his thinking, saying: “If you move too soon, you end up, you don’t have inflation all the path solved and you have to return. That is inefficient. If you move too late, you could do unnecessary damage to the labor market.”
Even during Powell’s press conference, Trump announced more tariffs on copper imports.
Inflation remains above the 2% target of the Central Bank, and has begun to operate recently. In June, the consumer price index increased at an annual rate of 2.7%, compared to 2.4% in May and 2.3% in April.
More delays to introduce the new rates of rates could lead to another avalanche of imports to the country. That, in turn, could also temporarily affect economic data, which makes it difficult for political leaders to establish interest rates or that companies plan it.
How we get here
Initially, Trump delayed the rates he presented in Spring, caused by a sale of the historical market after his announcement on April 2. The Trump administration then promised 90 agreements in 90 days. More than 90 days have passed, and there is no place about 90 offers. On the other hand, Trump has announced only a handful of agreements and tariffs unilaterally imposed on dozens of countries.
A country, Brazil, is now subject to more punitive measures in the form of a 50% rate that Trump linked to the blows of blows against former President Jair Bolsonaro, a Trump ally. Another, South Korea, was allowed to “buy” its path to a duty of 15%, below 25% threatened, by promising mass investments in the United States. Indonesia and the Philippines were also subjects of advertisements.
According to Yale’s budget laboratory, a group of non -partisan experts, the average effective fee will remain at approximately 18%. Tariffs are an import tax and, unlike Trump’s claims, the country of origin is not directly responsible for paying the tax. On the other hand, the cost of tariffs tends to be collected by the importing company, and ultimately, in many cases, US consumers. The Budget Laboratory says they add approximately 2% to the price indices, which calculates as equivalent to more than $ 2,000 per year for a typical home of the United States.
The Trump administration is depositing a return of production jobs to the United States as tariffs increase the cost of imports. Until now, there has been little evidence of a truck in manufacturing employment, although some of that is attributable to the Federal Reserve decision to maintain stable rates. Even so, the National Manufacturers Association has continued to ask for “zero” tariffs that reduce commercial barriers on both sides.
And although the S&P 500 has returned to the historical maximums, it has shown signs of losing impulse and was on the way to a perdemary week despite the bursting reports of technology companies that now represent increasing proportions of the index.
So far, tariffs have raised billions in government revenues that will help shave the federal deficit, but will not come to create a surplus. Even the members of the Republican party said in a statement this year that when it comes to the fiscal imbalances of the United States, “income is not the problem.”
Meanwhile, inflation measures continue to increase, which increases the perspective of stagflation. The Retail Federation has said that tariffs “threaten the American dream” while harming small businesses.
The deadline on Friday was designed to provide renewed certainty. Instead, companies have to accept “an increase in relative certainty,” said José Torres, a senior economist at Interactive Brokers Financial Group. If there is a positive side, it is that tariffs can greatly affect the rhythm of goods price growth, not services, and services now drive most of the US economy.
“In April, we thought we would go to a recession due to the tariff levels so high, that they will move the needle,” Torres said. “At this time, the landscape is quite buoyant.”
However, Torres said Trump probably could not put the tariff questions completely behind him even after the deadline of Friday, especially if countries begin to awaken their anger. Already, Trump announced another 90 -day extension for rates levels previously negotiated in Mexican imports, many of which are exempt thanks to the pre -existing USMCA trade agreement.
“I hope it remains a subject,” said Torres, and said that swing states that helped return Trump to the Oval office continue to climb by manufacturing work. “He’s going to try to meet that.”
