Before the EU deal, one of the biggest agreements struck in recent days was with Japan. Trump announced the deal on Tuesday, but the exact terms are still murky. According to a Truth Social post by Trump, the agreement set the U.S. tariff rate on Japanese imports at 15 percent—a welcome reduction from 25 percent Trump had previously threatened, but higher than the 10 percent levy that was in place while the countries negotiated. The Trump administration’s 25 percent global auto tariff will also drop to 15 percent for Japanese cars as part of the deal, and there will be no quota on the total number of imports. Trump also said that Japan would reduce barriers to the import of American cars and rice, and the U.S. ally would invest $550 billion into an investment fund to be used, supposedly, at Trump’s discretion. The president claimed the U.S. would “receive 90 percent of the profits,” describing the investment as “seed money.”

However—in what may be a troubling sign for all the White House’s trade agreements—the deal is more wobbly than Trump made it sound. There is no written deal between the two countries, and Japan has already contradicted some of Trump’s claims. According to Japan, the U.S. would receive profits from the investment fund proportional to its contributions and assumption of risk—a stark difference from Trump’s claim that Japan was fully financing a fund that gave the lion’s share of the profits to Washington. Moreover, the deal was reportedly a product of a hasty, 70-minute meeting between Trump and Japan’s chief negotiator. “The Japanese are describing [the fund] in vastly different terms than the president,” Justin Wolfers, a professor of public policy and economics at the University of Michigan, told TMD.

The discrepancy makes it difficult to tell what, exactly, the agreement actually entails. “There’s just no information whatsoever,” Mark Zandi, chief economist of Moody’s Analytics, told TMD. “I doubt, at the end of the day, it’s going to result in any increased investment in the United States.”

Looking beyond issues with the investment fund, the deal itself may also be less favorable for Americans than it initially seemed. The Japan agreement is unlikely to cause a significant change in demand for American cars or revenue to American rice farmers, according to Wolfers. And, of course, it results in tariffs that, while lower than what Trump initially threatened, are still significantly higher than tariff rates in recent history. 

“Nearly everyone was charging us tariffs of about 2 percent. We were charging them tariffs of about 2 percent,” Wolfers said. “Whatever tariff we end up charging Americans who import goods from Japan, it’s enormously higher than it was. If I look at the Japan agreement, what is economically meaningful is the tax on Americans who buy from Japan has gone from 2 percent to 15 percent.”

Similar deals have been struck with other countries, as well, but the results are a mixed bag. The United Kingdom reached a trade deal in May that kept levies at 10 percent, Vietnam received a rate of 20 percent, and the Philippines and Indonesia both landed at rates of 19 percent. The tariffs were not dramatically different from the April “Liberation Day” numbers—Indonesia and Vietnam dropped the most, from 32 percent and 46 percent, respectively. But the Philippines’ tariff at the time was 17 percent, and the U.K. rate was 10 percent, making the new deal a downgrade for the Philippines and a lateral move for Britain.

And with details not set in stone, the U.K. has also already faced issues with its agreement, particularly around restrictions on steel. Prime Minister Keir Starmer is set to meet with Trump on Monday to discuss the issue, as well as to seek a carveout from possible future pharmaceutical tariffs. The EU isn’t particularly satisfied with its deal, either. The bloc’s leaders were reportedly hoping for a rate that was 5 percentage points lower. “15 percent is not to be underestimated,” von der Leyen told reporters yesterday. “But it is the best we could get.” 

China, on the other hand, faces a separate deadline of August 12 to reach an agreement with the U.S., although the date is expected to be extended another 90 days. Mexico and Canada are also wild cards, as the two major trading partners haven’t yet reached a deal with the U.S. If negotiations fail to produce an agreement by the end of the month, products from Canada could be slapped with 35 percent tariffs, and goods from Mexico 30 percent. In a foreboding sign, Trump cast doubt on whether a deal could be reached with Canada at all when talking to reporters on Friday. “We haven’t really had a lot of luck with Canada,” he said. “I think Canada could be one where there’s just a tariff, not really a negotiation.”

“We’re back to where we were on Liberation Day,” Zandi said. “The tariffs have been up, down, all around, but when you look at the actual effective tariff rate—the rate that is being paid by U.S. consumers and businesspeople—it’s close to what the president put forward on Liberation Day.” The overall U.S. average effective tariff rate started at 2.4 percent in January, rose to its peak of 28 percent in April, and currently stands at 16.6 percent before the August 1 deadline. After the deadline, the rate will jump to 20.2 percent. 

“We’ll see slower growth and higher inflation over the course of the next six to 12 months. A good rule of thumb is that for every 1 percentage point increase in the effective tariff rate, that’ll raise inflation … 10 basis points,” Zandi said. Using this method, a nearly 18-point increase in the effective tariff rate from January would increase inflation by roughly 1.8 percent. “It’s going to be a pretty uncomfortable economy, and it’s going to be very vulnerable to anything else that goes wrong,” Zandi said. “The most likely scenario is we navigate through without a downturn, but it’s not going to feel very good. But all the risks are to the downside.” 

The Wall Street Journal reported last week that corporations have largely absorbed the costs of Trump’s tariffs thus far, accepting lower profit margins before raising prices for consumers. But that phenomenon may be coming to an end. “I think ultimately, it won’t continue,” Morris Cohen, a professor of manufacturing and logistics at the Wharton School at the University of Pennsylvania, told TMD. “I think there will be prices that will go up across the board. … That’s part of the reason we’re in a holding pattern for some companies because they don’t want to be caught being the first one, or maybe the only one to raise the price and be left at a disadvantage.” 

No matter what, though, companies—and global trading partners—are going to have to wrestle with the fact that the high tariffs are, in fact, going to take effect. “Cutting through the noise, tariffs are up, and they’re up a lot, and they’re going to go higher,” Zandi said. “There’s no TACO here. It’s actually happening.”