Tuesday Briefing: Trump's Tariff Leverage
As dozens of countries race to reach trade deals with the U.S. ahead of a Thursday deadline, President Trump has embraced a strategy that goes beyond the usual focus on markets and deficits: He's demanding multibillion-dollar investments in the U.S.
The president's tactics echo his 'Art of the Deal' approach. He is using economic leverage to essentially force trading partners to show him the money or face astronomical tariffs, my colleague Alan Rappeport writes from Washington.
To trade experts, the commitments raise the question of whether Trump is negotiating with trading partners or trade hostages. Here are a few examples.
To secure a lower tariff rate in its deal, South Korea agreed to make $350 billion in investments in the U.S. and buy $100 billion of liquefied natural gas.
The E.U indicated that it would buy $750 billion of American energy and that its companies were poised to invest at least $600 billion.
Japan said it would establish a $550 billion fund for investments in the U.S.
Trade experts cautioned that focusing on the eye-popping investment figures might be premature. Tariffs are easier to enforce than investment and purchase commitments, and their vague nature suggests that countries might be looking for creative ways to escape Trump's tariffs. Some of the pledges appear too big to be true, and many of them lack specifics.
More tariff news:
India: The foreign ministry said Trump's threat of additional tariffs was 'unjustified and unreasonable' and vowed to 'take all necessary measures' to safeguard India's interests.
Malaysia: The country's solar panel industry, which was decimated by tariffs under the Biden administration, provides a warning for the region.
A huge pay package for Musk
Tesla said yesterday that it had granted Elon Musk roughly $29 billion worth of stock to help retain the billionaire chief executive after a judge struck down his previous multibillion-dollar pay package.
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