Latest news with #tradeDeficit
Yahoo
a day ago
- Business
- Yahoo
122, 232, 301, 338: The numbers key to Trump's tariff revival
No matter the outcome of a major legal case on President Donald Trump's tariffs, his import taxes are likely here to stay — in one form or another. Even before a Wednesday ruling that Trump overstepped his authority by using a national emergency to impose most of his tariffs, there had already been discussions inside the West Wing about options if the courts struck down his expansive and untested use of emergency authority, two senior administration officials told CNN. 'We really do think we have a strong case and will win,' one of the officials said. 'But we do have other tools that can get us to the same exact place we're ready to use if necessary.' Key to those efforts: using different trade-related laws to push forward more tariffs. Here are the most likely options the administration could tap into: This law allows a president to levy a tariff of up to 15% for a maximum of 150 days to address 'large and serious United States balance-of-payments deficits.' That would occur when the value of a country's imports far exceeds that of exports, also referred to as a trade deficit. The US currently runs an $87.6 billion goods trade deficit, according to advanced figures the Census Bureau released on Friday. Trump often claims large deficits are a sign the US is being 'ripped off' and treated unfairly. Many economists, however, are much less convinced of his argument, with some even noting that a trade deficit can be a reflection of a strong economy and the power of the US to effectively stimulate the global economy. Administration officials initially weighed using Section 122 to impose higher tariffs but decided not to, due to the 150-day limit. If the administration goes down this path, it could replace the current 10% universal baseline tariff on nearly every country's exports. After the 150-day period concludes, the levies can only continue if Congress signs off on them. This gives the president the authority to impose higher tariffs on national security grounds. It can only be used to target specific sectors and requires an investigation to be launched before tariffs can be imposed. For instance, a recent Section 232 investigation the administration launched into imports of critical minerals claimed that 'overreliance on foreign critical minerals and their derivative products could jeopardize US defense capabilities, infrastructure development, and technological innovation.' There are several other current Section 232 investigations concerning other sectors. The 25% across-the-board tariffs on steel, aluminum, cars and car parts were all the result of 232 investigations. These tariffs can continue to remain in place regardless of how the appeal on the allegedly emergency-related tariffs proceeds. 'Trump has not emphasized sectoral tariffs as frequently lately as he did earlier this year, but if the White House finds it has less flexibility on country-focused tariffs, sectoral tariffs might receive more attention again,' Goldman Sachs economists said in a recent note. This allows the USTR to investigate countries potentially violating other nations' trade agreements or practices in a way that is 'unjustifiable' and 'burdens or restricts' US business. Trump used Section 301 during his first term to hike tariffs on several Chinese imports, along with aircraft and other European Union goods. Ultimately, it could take weeks or even months for those investigations to lead to tariffs because of the lengthier process involved, including a period for public comment, compared to recently imposed tariffs. But, unlike Section 122, there's no limit to the level or duration of tariffs arising from Section 301 investigations. While never implemented by any president, Trump can use this law to impose tariffs of up to 50% on countries' imports if he believes they are engaging in trade practices that discriminate against the US. Doing so, however, could violate World Trade Organization agreement terms and prompt steep retaliation from impacted countries. Despite the clear setback delivered by the courts, administration officials insist nothing has shifted in Trump's thinking. That message is in part one of necessity, given that the threat of dramatically higher tariff rates is the central leverage the administration is using in the 18 separate bilateral trade talks that the administration says are underway. 'President Trump is 100% serious about this,' one official told CNN. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
2 days ago
- Business
- CNN
122, 232, 301, 338: The numbers key to Trump's tariff revival
No matter the outcome of a major legal case on President Donald Trump's tariffs, his import taxes are likely here to stay — in one form or another. Even before a Wednesday ruling that Trump overstepped his authority by using a national emergency to impose most of his tariffs, there had already been discussions inside the West Wing about options if the courts struck down his expansive and untested use of emergency authority, two senior administration officials told CNN. 'We really do think we have a strong case and will win,' one of the officials said. 'But we do have other tools that can get us to the same exact place we're ready to use if necessary.' Key to those efforts: using different trade-related laws to push forward more tariffs. Here are the most likely options the administration could tap into: This law allows a president to levy a tariff of up to 15% for a maximum of 150 days to address 'large and serious United States balance-of-payments deficits.' That would occur when the value of a country's imports far exceeds that of exports, also referred to as a trade deficit. The US currently runs an $87.6 billion goods trade deficit, according to advanced figures the Census Bureau released on Friday. Trump often claims large deficits are a sign the US is being 'ripped off' and treated unfairly. Many economists, however, are much less convinced of his argument, with some even noting that a trade deficit can be a reflection of a strong economy and the power of the US to effectively stimulate the global economy. Administration officials initially weighed using Section 122 to impose higher tariffs but decided not to, due to the 150-day limit. If the administration goes down this path, it could replace the current 10% universal baseline tariff on nearly every country's exports. After the 150-day period concludes, the levies can only continue if Congress signs off on them. This gives the president the authority to impose higher tariffs on national security grounds. It can only be used to target specific sectors and requires an investigation to be launched before tariffs can be imposed. For instance, a recent Section 232 investigation the administration launched into imports of critical minerals claimed that 'overreliance on foreign critical minerals and their derivative products could jeopardize US defense capabilities, infrastructure development, and technological innovation.' There are several other current Section 232 investigations concerning other sectors. The 25% across-the-board tariffs on steel, aluminum, cars and car parts were all the result of 232 investigations. These tariffs can continue to remain in place regardless of how the appeal on the allegedly emergency-related tariffs proceeds. 'Trump has not emphasized sectoral tariffs as frequently lately as he did earlier this year, but if the White House finds it has less flexibility on country-focused tariffs, sectoral tariffs might receive more attention again,' Goldman Sachs economists said in a recent note. This allows the USTR to investigate countries potentially violating other nations' trade agreements or practices in a way that is 'unjustifiable' and 'burdens or restricts' US business. Trump used Section 301 during his first term to hike tariffs on several Chinese imports, along with aircraft and other European Union goods. Ultimately, it could take weeks or even months for those investigations to lead to tariffs because of the lengthier process involved, including a period for public comment, compared to recently imposed tariffs. But, unlike Section 122, there's no limit to the level or duration of tariffs arising from Section 301 investigations. While never implemented by any president, Trump can use this law to impose tariffs of up to 50% on countries' imports if he believes they are engaging in trade practices that discriminate against the US. Doing so, however, could violate World Trade Organization agreement terms and prompt steep retaliation from impacted countries. Despite the clear setback delivered by the courts, administration officials insist nothing has shifted in Trump's thinking. That message is in part one of necessity, given that the threat of dramatically higher tariff rates is the central leverage the administration is using in the 18 separate bilateral trade talks that the administration says are underway. 'President Trump is 100% serious about this,' one official told CNN.
CNN
2 days ago
- Business
- CNN
122, 232, 301, 338: The numbers key to Trump's tariff revival
No matter the outcome of a major legal case on President Donald Trump's tariffs, his import taxes are likely here to stay — in one form or another. Even before a Wednesday ruling that Trump overstepped his authority by using a national emergency to impose most of his tariffs, there had already been discussions inside the West Wing about options if the courts struck down his expansive and untested use of emergency authority, two senior administration officials told CNN. 'We really do think we have a strong case and will win,' one of the officials said. 'But we do have other tools that can get us to the same exact place we're ready to use if necessary.' Key to those efforts: using different trade-related laws to push forward more tariffs. Here are the most likely options the administration could tap into: This law allows a president to levy a tariff of up to 15% for a maximum of 150 days to address 'large and serious United States balance-of-payments deficits.' That would occur when the value of a country's imports far exceeds that of exports, also referred to as a trade deficit. The US currently runs an $87.6 billion goods trade deficit, according to advanced figures the Census Bureau released on Friday. Trump often claims large deficits are a sign the US is being 'ripped off' and treated unfairly. Many economists, however, are much less convinced of his argument, with some even noting that a trade deficit can be a reflection of a strong economy and the power of the US to effectively stimulate the global economy. Administration officials initially weighed using Section 122 to impose higher tariffs but decided not to, due to the 150-day limit. If the administration goes down this path, it could replace the current 10% universal baseline tariff on nearly every country's exports. After the 150-day period concludes, the levies can only continue if Congress signs off on them. This gives the president the authority to impose higher tariffs on national security grounds. It can only be used to target specific sectors and requires an investigation to be launched before tariffs can be imposed. For instance, a recent Section 232 investigation the administration launched into imports of critical minerals claimed that 'overreliance on foreign critical minerals and their derivative products could jeopardize US defense capabilities, infrastructure development, and technological innovation.' There are several other current Section 232 investigations concerning other sectors. The 25% across-the-board tariffs on steel, aluminum, cars and car parts were all the result of 232 investigations. These tariffs can continue to remain in place regardless of how the appeal on the allegedly emergency-related tariffs proceeds. 'Trump has not emphasized sectoral tariffs as frequently lately as he did earlier this year, but if the White House finds it has less flexibility on country-focused tariffs, sectoral tariffs might receive more attention again,' Goldman Sachs economists said in a recent note. This allows the USTR to investigate countries potentially violating other nations' trade agreements or practices in a way that is 'unjustifiable' and 'burdens or restricts' US business. Trump used Section 301 during his first term to hike tariffs on several Chinese imports, along with aircraft and other European Union goods. Ultimately, it could take weeks or even months for those investigations to lead to tariffs because of the lengthier process involved, including a period for public comment, compared to recently imposed tariffs. But, unlike Section 122, there's no limit to the level or duration of tariffs arising from Section 301 investigations. While never implemented by any president, Trump can use this law to impose tariffs of up to 50% on countries' imports if he believes they are engaging in trade practices that discriminate against the US. Doing so, however, could violate World Trade Organization agreement terms and prompt steep retaliation from impacted countries. Despite the clear setback delivered by the courts, administration officials insist nothing has shifted in Trump's thinking. That message is in part one of necessity, given that the threat of dramatically higher tariff rates is the central leverage the administration is using in the 18 separate bilateral trade talks that the administration says are underway. 'President Trump is 100% serious about this,' one official told CNN.
Gizmodo
2 days ago
- Business
- Gizmodo
U.S. Imports Drop 19.8% in April (Yes, That's a Record)
Trump's on-again, off-again tariffs are starting to bite. Imports of goods into the U.S. dropped a record 19.8% in April, according to estimates released by the U.S. Commerce Department on Friday. That drop is in sharp contrast to a 5.7% uptick of goods imported in March, widely believed to be driven by U.S. retailers and consumers buying in advance of President Donald Trump's tariff threats, which are expected to cause prices to soar. The new estimates show that America's trade deficit with the rest of the world narrowed by 46% to $87.6 billion, according to Marketwatch, much lower than the $143 billion projected by economists. And that should make President Trump very happy, since he's obsessed with the trade deficit. But that's not how any mainstream economist values the health of the U.S. economy. As countless economists have pointed out, the average consumer has a trade deficit with their barber or their local grocery store, but that doesn't mean your barber is stealing from you, as Trump has characterized global trade relations. It just means that you've purchased something and, presumably, you're better for it. President Trump first announced incredibly high tariffs on April 2, which he dubbed 'Liberation Day,' including a 10% universal tariffs across the board on all goods coming into the country. Trump's tariffs on goods coming from China soared to 145% at one point, but that was reduced to about 30% on most goods recently after the president and negotiators from China agreed to a framework for negotiations to continue. But Trump reversed his position again on Friday, accusing China of violating the agreement without providing evidence. 'Two weeks ago China was in grave economic danger!' Trump wrote on Truth Social Friday morning. 'The very high Tariffs I set made it virtually impossible for China to TRADE into the United States marketplace which is, by far, number one in the World. We went, in effect, COLD TURKEY with China, and it was devastating for them.' Trump went on to claim that 'many factories' had been closed and there was 'civil unrest' in China over the trade war, neither of which is true. But Trump insisted he made a deal to help China in this situation. 'I saw what was happening and didn't like it, for them, not for us. I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn't want to see that happen,' Trump wrote. 'Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!! The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!' Again, Trump did not explain how China had supposedly violated the deal. But U.S. Trade Representative Jamieson Greer told the Wall Street Journal on Friday the administration believes China has been 'reluctant' to approve exports of rare-earth materials. The president's tariffs have not only changed based on how he's feeling on any given day—they're also currently being litigated. On Wednesday, the Court of International Trade ruled that Trump's tariffs were invalid because only Congress has the power under the U.S. Constitution to impose tariffs. Trump argues that he has emergency powers to enact tariffs, and on Thursday an appeals court ruled the tariffs could remain while the case is heard. Trump is also trying to get his budget bill passed through the Senate, with a very ambitious goal of having it signed on July 4. But the bill, which has already passed the House, includes a $800 million cut to Medicaid and would be a handout to the wealthy, as most analysts believe. The Senate is also resistant to raising the SALT deduction, which occurred at the last minute in the House bill thanks to blue state Republicans who don't like that constituents in higher tax states like California and New York aren't allowed to write off more of their state and local taxes on their federal returns. The bill will also add to the federal deficit, but the White House insists the economic 'growth' that will be unleashed by the bill will pay for itself in that regard. Trump whined about the nonpartisan Congressional Budget Office on Friday, claiming it was 'controlled' by the Democrats and that its assessment of the bill didn't account for all this promised growth. 'The information they recently released is even more absurd and indefensible,' Trump wrote about the CBO estimates on Truth Social. 'I predict we will do 3, 4, or even 5 times the amount they purposefully 'allotted' to us (1.8%) and, with just our minimum expected 3% Growth, we will more than offset our Tax Cuts (which will, in actuality, cost us no money!).' Wall Street has come up with a new acronym this week called TACO ('Trump Always Chickens Out') a reference to the president's habit of making wild threats about tariffs and ultimately scaling them way back. Trump was asked about TACO at a press conference this week, and it clearly got under his skin. 'Don't ever say what you said,' Trump said to the reporter. 'That's a nasty question.'
Zawya
2 days ago
- Business
- Zawya
US goods trade deficit narrows sharply in April as imports plunge
The U.S. trade deficit in goods narrowed sharply in April as the boost from the front-running of imports ahead of tariffs faded. The goods trade gap contracted 46.0% to $87.6 billion last month, the Commerce Department's Census Bureau said on Friday. Goods imports decreased $68.4 billion to $276.1 billion. Exports of goods increased $6.3 billion to $188.5 billion. A rush to beat import duties pushed the goods trade deficit to a record high in March. The front-running of imports is probably not over. Higher duties for most countries have been postponed until July, while those for Chinese goods have been delayed until mid-August amid negotiations between President Donald Trump's administration and trade partners. Economists said that could see some businesses trying to bring in more imports given the lack of clarity about what happens after the 90-day pauses. Adding to the uncertainty, a U.S. trade court on Wednesday blocked most of Trump's tariffs from going into effect in a sweeping ruling that the president overstepped his authority. They were temporarily reinstated by a federal appeals court on Thursday. A record trade gap accounted for a large part of the 0.2% annualized rate of decline in gross domestic product in the first quarter. (Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
