Donald’s deadline for EVERYBODY WAS August 1st?
Well?
NOT for Everybody….
There are just hours to go before President Donald Trump’s deadline for scores of countries to strike trade deals with the U.S. or face steep tariffs. The president has managed to bend many trading partners to his will with lopsided (if vaguely sketched) agreements — and largely sidestepped, so far, the negative economic fallout that experts had predicted. But as the clock ticks down, Trump’s protectionist agenda is also facing some fresh headwinds.
Inflation nation: The Personal Consumption Expenditures price index, a crucial inflation data point and the Fed’s preferred metric, rose to 2.6 percent annually in June, per Bloomberg. That was up from 2.4 percent in May and a tick higher than economists expected. And it indicates that the fallout from Trump’s tariffs is starting to push up prices for American consumers, even before his most sweeping levies take effect. Inflation remaining stubborn even as the labor market cools will make the central bank’s task more difficult.
In the courts: At the same time, Trump’s tariff regime faces a serious legal threat. Federal appellate judges today sounded dubious of the administration’s arguments that Trump has the authority to impose tariffs under the International Emergency Economic Powers Act, per CNBC’s Kevin Breuninger and Dan Mangan. Judges pointed out that the law doesn’t mention tariffs and that Trump is claiming essentially unbounded power to declare an emergency and impose tariffs, regardless of legal restrictions on his authority. The U.S. Court of International Trade has already struck down Trump’s tariffs, but that decision is paused as the legal proceedings — which could go up to the Supreme Court — play out on the merits.
Not so firm: After Trump insisted there would be no extensions of his Aug. 1 deadline, Mexican President Claudia Sheinbaum managed to secure one nonetheless. The two leaders spoke this morning, and Trump announced afterward that the U.S.-Mexico status quo will be extended another 90 days to allow for more in-depth talks. That means 25 percent tariffs on Mexican cars and 50 percent tariffs on Mexican metals will remain in place, but Mexico avoids broader 30 percent tariffs that were due to take effect tomorrow. Trump said Mexico agreed to lower trade barriers.
Still struggling for deals: South Africa’s trade minister said the country was trying one more last-minute offer to reach a deal and avoid 30 percent tariffs, per Reuters. And Indian PM Narendra Modi’s government is reeling from Trump’s hard line on tariffs despite Modi’s efforts to build a relationship with him, NYT’s Mujib Mashal reports from New Delhi.
The devil in the details: For industry, the specifics of how the tariffs will be implemented remain a question mark, with companies eagerly waiting for the fine print and struggling with chaos in the meantime, Bloomberg’s Laura Curtis reports. And there’s a corresponding lack of detail on foreign countries’ pledges to make big investments in the U.S. and buy American natural gas….
There will be NO Tariff Trump ‘Rebates’
“The big thing we want to do is pay down debt, but we’re thinking about a rebate,” Trump told reporters last week. “We have so much money coming in from tariffs that a little rebate for people of a certain income level might be really nice.”….
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But most Republican senators said the first priority should be digging out of debt.
“We’re $37 trillion in debt. We’re running deficits close to $2 trillion. I wouldn’t support it,” Sen. Ron Johnson (R-Wisconsin) said. “At some point in time, this madness has to end.”
A White House spokesman did not immediately return a request for comment on the GOP reticence.
In general, American companies that import goods from other countries pay for tariffs. They usually pass along the increased cost to consumers. Sometimes, overseas manufacturers also absorb some of the costs….