Trump injects a new dose of uncertainty in tariffs as he pushes start date back to Aug. 7
But when Trump signed the order Thursday night imposing new tariffs, the start date of the punishing import taxes was pushed back seven days so the tariff schedule could be updated. The change in tariffs on 66 countries, the European Union, Taiwan and the Falkland Islands was potentially welcome news to countries that had not yet reached a deal with the U.S. It also injected a new dose of uncertainty for consumers and businesses still wondering what's going to happen and when.
Trump told NBC News in a Thursday night interview the tariffs process was going "very well, very smooth." But even as the Republican president insisted these new rates would stay in place, he added: "It doesn't mean that somebody doesn't come along in four weeks and say we can make some kind of a deal."
Trump has promised that his tax increases on the nearly $3 trillion in goods imported to the United States will usher in newfound wealth, launch a cavalcade of new factory jobs, reduce the budget deficits and, simply, get other countries to treat America with more respect.
The vast tariffs risk jeopardizing America's global standing as allies feel forced into unfriendly deals. As taxes on the raw materials used by U.S. factories and basic goods, the tariffs also threaten to create new inflationary pressures and hamper economic growth -- concerns the Trump White House has dismissed.
Questions swirl around the tariffs despite Trump's eagerness
As the clock ticked toward Trump's self-imposed deadline, few things seemed to be settled other than the president's determination to levy the taxes he has talked about for decades. The very legality of the tariffs remains an open question as a U.S. appeals court on Thursday heard arguments on whether Trump had exceeded his authority by declaring an "emergency" under a 1977 law to charge the tariffs, allowing him to avoid congressional approval.
Trump was ebullient as much of the world awaited what he would do.
"Tariffs are making America GREAT & RICH Again," he said Thursday morning on Truth Social.
Others saw a policy carelessly constructed by the U.S. president, one that could impose harms gradually over time that would erode America's power and prosperity.
"The only things we'll know for sure on Friday morning are that growth-sapping U.S. import taxes will be historically high and complex, and that, because these deals are so vague and unfinished, policy uncertainty will remain very elevated," said Scott Lincicome, a vice president of economics at the Cato Institute. "The rest is very much TBD."
The new tariffs build off ones announced in the spring
Trump initially imposed the Friday deadline after his previous "Liberation Day" tariffs in April resulted in a stock market panic. His unusually high tariff rates announced then led to recession fears, prompting Trump to impose a 90-day negotiating period. When he was unable to create enough trade deals with other countries, he extended the timeline and sent out letters to world leaders that simply listed rates, prompting a slew of hasty agreements.
Swiss imports will now be taxed at a higher rate, 39%, than the 31% Trump threatened in April, while Liechtenstein saw its rate slashed from 37% to 15%. Countries not listed in the Thursday night order would be charged a baseline 10% tariff.
Trump negotiated trade frameworks over the past few weeks with the EU, Japan, South Korea, Indonesia and the Philippines -- allowing the president to claim victories as other nations sought to limit his threat of charging even higher tariff rates. He said Thursday there were agreements with other countries, but he declined to name them.
Asked on Friday if countries were happy with the rates set by Trump, U.S. Trade Representative Jamieson Greer said: "A lot of them are."
Thursday began with a palpable sense of tension
The EU was awaiting a written agreement on its 15% tariff deal. Switzerland and Norway were among the dozens of countries that did not know what their tariff rate would be, while Trump agreed after a Thursday morning phone call to keep Mexico's tariffs at 25% for a 90-day negotiating period. The president separately on Thursday amended an order to raise certain tariffs on Canada to 35%.
European leaders face blowback for seeming to cave to Trump, even as they insist that this is merely the start of talks and stress the importance of maintaining America's support of Ukraine's fight against Russia. Canadian Prime Minister Mark Carney has already indicated that his country can no longer rely on the U.S. as an ally, and Trump declined to talk to him on Thursday.
India, with its 25% tariff announced Wednesday by Trump, may no longer benefit as much from efforts to pivot manufacturing out of China. While the Trump administration has sought to challenge China's manufacturing dominance, it is separately in extended trade talks with that country, which faces a 30% tariff and is charging a 10% retaliatory rate on the U.S.
Major companies came into the week warning that tariffs would begin to squeeze them financially. Ford Motor Co. said it anticipated a net $2 billion hit to earnings this year from tariffs. French skincare company Yon-Ka is warning of job freezes, scaled-back investment and rising prices.
It's unclear whether Trump's new tariffs will survive a legal challenge
Federal judges sounded skeptical Thursday about Trump's use of a 1977 law to declare the long-standing U.S. trade deficit a national emergency that justifies tariffs on almost every country.
"You're asking for an unbounded authority," Judge Todd Hughes of the U.S. Court of Appeals for the Federal Circuit told a Justice Department lawyer representing the administration.
The judges didn't immediately rule, and the case is expected to reach the Supreme Court eventually.
The Trump White House has pointed to the increase in federal revenues as a sign that the tariffs will reduce the budget deficit, with $127 billion in customs and duties collected so far this year -- about $70 billion more than last year.
New tariffs threaten to raise inflation rates
There are not yet signs that tariffs will lead to more domestic manufacturing jobs, and Friday's employment report showed the U.S. economy now has 37,000 fewer manufacturing jobs than it did in April.
On Thursday, one crucial measure of inflation, known as the Personal Consumption Expenditures index, showed that prices have climbed 2.6% over the 12 months that ended in June, a sign that inflation may be accelerating as the tariffs flow through the economy.
The prospect of higher inflation from the tariffs has caused the Federal Reserve to hold off on additional cuts to its benchmark rates, a point of frustration for Trump, who on Truth Social, called Fed Chair Jerome Powell a "TOTAL LOSER."
But before Trump's tariffs, Powell seemed to suggest that the tariffs had put the U.S. economy and much of the world into a state of unknowns.
"There are many uncertainties left to resolve," Powell told reporters Wednesday. "So, yes, we are learning more and more. It doesn't feel like we're very close to the end of that process. And that's not for us to judge, but it does -- it feels like there's much more to come."
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The Mainichi
4 hours ago
- The Mainichi
From Laos to Brazil, Trump's tariffs leave a lot of losers. But even the winners will pay a price
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Trump's decision to plaster a 35% tariff on longstanding U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu. Switzerland was clobbered with a 39% import tax -- even higher than the 31% Trump originally announced on April 2. "The Swiss probably wish that they had camped in Washington'' to make a deal, said Wolff, now senior fellow at the Peterson Institute for International Economics. "They're clearly not at all happy.'' Fortunes may change if Trump's tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his Liberation Day tariffs exceeded his authority under the 1977 law. 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This is where Trump's leverage tactics come in handy as Washington pushes America's trading partners — including Japan — to buy more U.S. gas in exchange for more lenient tariffs. The question of Asia's gas needs also hangs over what U.S. President Donald Trump hopes will become the crown jewel of American energy dominance: Alaska LNG. | Reuters In February, Trump said Japan would start importing 'record numbers' of American LNG. While the president's hyperboles should be taken with a comparably large grain of salt, Japanese companies have indeed been buying more of the fuel this year, on top of already sizable contracts and investments. Japanese banks are the top three financiers of LNG export projects in the U.S. Jera, Japan's largest power generator and one of the biggest LNG importers globally, has increased the U.S. share of its gas mix from 10% to nearly 30%. On July 22, as the ink on the U.S.-Japan trade deal was still drying, Trump said Japan had agreed to form a joint venture to develop an LNG project in Alaska, without specifying which project. The details of any potential venture remain unclear. But the reality for those living at the heart of the American LNG buildout, in the coastal communities of Texas and Louisiana that look out on to the Gulf of Mexico, is one of diminishing returns. Having already suffered the brunt of decades of oil, gas and petrochemical development — including a boom in LNG export facilities in the wake of the 2016 U.S. shale gas revolution that transformed the country from a net gas importer into the world's No. 1 exporter — their health, livelihoods and environment are at stake as more facilities are due to come online. 'Paying for, financing, funding and insuring these projects is ensuring my children's deaths,' says Roishetta Ozane, founder of the Vessel Project of Louisiana, a disaster relief and environmental justice organization, and co-director of the Gulf South Fossil Finance Hub, who lives in Sulphur, Louisiana. Ozane's six children suffer from ailments including skin, respiratory and neurological disorders. Near where her family lives, CP2 LNG, a planned LNG export facility, reached a final investment decision — a key milestone for large energy projects — last month, thanks in part to a political and regulatory environment that is proving to be as accommodating to fossil fuel development as it is hostile to climate policies and renewable energy. Redrawing the energy map The U.S. government is doing everything in its power to move gas projects ahead, with Trump kicking off a wave of environmental deregulation and oil and gas permitting. On his first day back in office, the president signed an executive order called Unleashing American Energy, undoing predecessor Joe Biden's investments in clean energy and electric vehicles and boosting production of oil and gas — the 'liquid gold under our feet,' as Trump called it in his inaugural address. Fishing boats in the Calcasieu Ship Channel, which connects Lake Charles, Louisiana, with the Gulf of Mexico. Since Calcasieu Pass LNG started production in 2022, catches of shrimp, crabs and fish have decreased dramatically year after year, local fishers say. | Mara Budgen Soon after, Washington established the National Energy Dominance Council, headed by Interior Secretary Doug Burgum and Energy Secretary Chris Wright, a fracking millionaire. The One Big Beautiful Bill Act, the gargantuan Republican spending legislation adopted in July, incentivizes oil and gas leasing, including by lowering federal royalties rates, and repeals a fee on methane emissions. Trump also lifted a moratorium on permits for new LNG export facilities that was adopted by Biden in January 2024. Among such facilities, CP2 LNG, located in the Calcasieu Ship Channel in Cameron Parish, Louisiana, has received federal approval; if constructed, it would put the company that owns the project, Venture Global, in the lead as the United States' biggest LNG exporter. LNG has also become a major bargaining chip in Trump's trade wars. While this isn't the first U.S. administration to use the fuel as a geopolitical tool, 'Trump has taken a sticks, not a carrot approach' like others before him, says Sam Reynolds, a research lead at the U.S.-based Institute for Energy Economics and Financial Analysis (IEEFA). This push 'has been largely successful' as Asian, European and Middle Eastern buyers sign on to purchase more American gas. 'The administration is trying to redraw the map of energy dependence,' says Reynolds, though the growing competitiveness of renewable energy globally 'will challenge what the U.S. can feasibly achieve by doubling down on fossil fuels.' Footing the bill On an early morning in mid-July, Ray Mallet is on his boat in the Calcasieu Ship Channel, where CP2 LNG is being built, on the coast of the Gulf of Mexico — waters he knows well, having worked there as a commercial fisher all his life. But on this day, Mallet isn't casting his nets and lines as usual. Together with other fishers, as well as scientists and local environmentalists, he's deploying hydrophones in the water to test whether noise pollution from the Calcasieu Pass LNG export terminal, which sits where the channel meets the gulf, is causing a severe decline in seafood catch rates. U.S. President Donald Trump holds a joint press conference with Prime Minister Shigeru Ishiba at the White House in Washington on Feb. 7. | Reuters The hydrophones are being used to scientifically verify what local fisherfolk already 'know and see,' says Alyssa Portaro, founder of the Habitat Recovery Project, a Louisiana-based conservation nonprofit that is running the data collection project: Since Calcasieu Pass LNG started production in 2022, catches of shrimp, crabs and fish have decreased dramatically year after year. 'I've had to go fish elsewhere to try to support my family,' Mallet says. Anthony Theriot, known as 'Tad,' who lives a little over 1.5 kilometers from Calcasieu Pass LNG, has also been fishing here his whole life. Shrimpers and fishers used to make a good living, he says, but income has declined sharply since the plant started. 'This was the No. 1 seafood capital of the U.S. and now it's the world capital of LNG exports,' says Portaro. What is happening in Cameron Parish mirrors conditions across the Gulf Coast. Existing socioeconomic disparities are being exacerbated as American LNG facilities 'tend to be sited in areas that are disproportionately home to communities of color and low-income communities,' according to a U.S. Department of Energy (DOE) study on the impacts of U.S. LNG exports that was mandated by the Biden-era moratorium. But the consequences may be felt further afield: The U.S. Energy Information Administration expects domestic gas prices to more than double through 2026 compared with last year and the DOE study finds that increasing LNG exports will lead to higher electric bills. Rising prices are also a concern for the industry as the cost of building LNG plants has soared, compounded by 50% U.S. tariffs on imported steel and aluminium. Among those caught in the fallout is a major Japanese engineering, procurement and construction contractor, Chiyoda Corp., which in July stated that it will stop pursuing large-scale LNG projects overseas due to losses incurred from some U.S. facilities. Ultimately, international buyers will foot at least part of the bill. 'U.S. LNG prices abroad are based on that domestic gas price as well as the capital expenditure of the facilities and both of those are rising,' says IEEFA's Reynolds. In signing up for more American gas, Japan is 'essentially committing over the long term to pay more for LNG.' Unleashing a carbon bomb? The world's top LNG players, including Japan, are predicting high prices and high demand for the fuel, especially in Asia, over the next couple of decades. Yet many others foresee a glut in the market, with expected amounts of additional LNG supply above the level of demand in developing parts of Asia, according to Anne-Sophie Corbeau, global research scholar at Columbia University's Center on Global Energy Policy. 'There is a reasonable question about where all this LNG is going to go,' Corbeau says. Reynolds points, for example, to the industry's overly optimistic predictions about China. While it is the world's largest buyer of LNG, having surpassed Japan in 2021, its imports haven't grown significantly since then, in part due to a record-breaking adoption of renewable energy. In Japan, gas demand is declining year after year, though according to the economy ministry, predicting future trends is difficult given the advent of new industries and technologies. This means preparing for several scenarios, including one in which electricity demand increases due to the growth of artificial intelligence, among other factors, but energy sources such as renewables are deployed slowly. The government envisions a significant reduction of thermal power — including coal and gas — in Japan's energy mix, but continues to set high targets for how much LNG its companies should contract. A children's playground next to the Freeport LNG export terminal in Texas. Existing socioeconomic disparities are being exacerbated as American LNG facilities 'tend to be sited in areas that are disproportionately home to communities of color and low-income communities,' according to a U.S. Department of Energy study. | Mara Budgen What LNG isn't needed domestically is increasingly being resold to countries in South and Southeast Asia. The question of Asia's gas needs also hangs over what Trump hopes will become the crown jewel of American energy dominance: Alaska LNG. The project entails building a 1,300-kilometer north-south pipeline to transport gas across the largest U.S. state. From the south coast, LNG would be shipped to Asia via a much shorter route than that from the Gulf Coast — for example, gas would reach Japan in around 10 days rather than the typical 30 to 40 days. Despite being under discussion for decades, Alaska LNG has never been developed due to the huge cost of building and operating a pipeline in the state's harsh geographic and climatic conditions. In 2016, energy consultancy Wood Mackenzie called it 'one of the least competitive' LNG projects in the world. Estimated to cost $44 billion — proportionally double the price of LNG export projects in the Gulf Coast — additional expenses, such as those incurred from the new tariff regime, haven't even been factored in yet, Reynolds points out. Alaska LNG has signed a nonbinding agreement with a Thai buyer and received interest from Indian, Taiwanese and South Korean players as well as Japanese companies such as Jera, Tokyo Gas and Mitsui. In contrast, the president of Japan Petroleum Exploration told Reuters in February that Alaska LNG 'is not a realistic investment proposition due to its unclear economics and large scale.' 'If it has not taken a final investment decision, there is a very simple reason for that — economics,' Corbeau says. Chris Wright, U.S. energy secretary, speaks during a conference in February. | Eric Lee / The New York Times Climate concerns also loom large when it comes to Alaska LNG — labeled a 'carbon bomb' by environmental groups — and other such developments. As global demand for oil collapses, gas is the fossil fuel industry's last frontier. To some, this is good news, as gas emits less carbon dioxide than coal and oil when burned and can keep the lights on as societies transition to less carbon-intensive energy systems. Others are concerned that investments in gas compete with those in renewables — a fact also highlighted by the DOE study — while experts note that lower carbon dioxide emissions does not mean it is a clean alternative, particularly because of the significant amount of methane emitted along the value chain. 'It's like you're trying to eat a healthier diet and instead of eating cookies, you're going to eat candy,' says Allie Rosenbluth, U.S. campaign manager at U.S.-based nonprofit Oil Change International. Why not 'try an apple'? Some Gulf Coast communities are taking matters into their own hands. Melanie Oldham, founder and director of environmental justice organization Better Brazoria, lives a few kilometers from the Freeport LNG export facility in Freeport, Texas. Her community has started recording methane emissions from the plant using an optical gas imaging camera so that 'people can see that we're telling the truth' about LNG pollution, Oldham says. While climate skeptics such as Wright — Trump's energy secretary, who has described concerns about climate change as a 'mania' — are too vocal a contingent in the U.S. government, Oldham urges 'decision-makers in Europe and Asia (to) take a look at the whole picture.' 'People know that these projects are not a done deal,' says Rosenbluth. 'They need local and state permits. They need financiers, they need actual buyers, and many of these projects do not have all of those things.'
