WASHINGTON\u00a0\u2014\u00a0President Donald Trump began levying higher import taxes on dozens of countries Thursday, just as the economic fallout of his monthslong tariff threats has begun to create visible damage for the U.S. economy.<\/p>\n
Just after midnight, goods from more than 60 countries and the European Union became subject to tariff rates of 10% or higher. Products from the EU, Japan and South Korea are taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh are taxed at 20%. Trump also expects the EU, Japan and South Korea to invest hundreds of billions of dollars in the U.S.<\/p>\n
\u201cI think the growth is going to be unprecedented,\u201d Trump said Wednesday afternoon. He added that the U.S. was \u201ctaking in hundreds of billions of dollars in tariffs,\u201d but he couldn\u2019t provide a specific figure for revenues because \u201cwe don\u2019t even know what the final number is\u201d regarding tariff rates.<\/p>\n
Despite the uncertainty, the Trump White House is confident that the onset of his broad tariffs will provide clarity about the path of the world\u2019s largest economy. Now that companies understand the direction the U.S. is headed, the Republican administration believes they can ramp up new investments and jump-start hiring in ways that can rebalance the U.S. economy as a manufacturing power. <\/p>\n
But so far, there are signs of self-inflicted wounds to America as companies and consumers alike brace for the impact of new taxes. What the data has shown is a U.S. economy that changed in April with Trump\u2019s initial rollout of tariffs, an event that led to market drama, a negotiating period and Trump\u2019s ultimate decision to start his universal tariffs on Thursday.<\/p>\n
Risk of economic erosion<\/p>\n
Economic reports show that hiring began to stall, inflationary pressures crept upward and home values in key markets started to decline after April, said John Silvia, CEO of Dynamic Economic Strategy.<\/p>\n
\u201cA less productive economy requires fewer workers,\u201d Silvia said in an analysis note. \u201cBut there is more, the higher tariff prices lower workers\u2019 real wages. The economy has become less productive, and firms cannot pay the same real wages as before. Actions have consequences.\u201d<\/p>\n
Even then, the ultimate transformations of the tariffs are unknown and could play out over months, if not years. Many economists say the risk is that the American economy is steadily eroded rather than collapsing instantly.<\/p>\n
\u201cWe all want it to be made for television where it\u2019s this explosion \u2014 it\u2019s not like that,\u201d said Brad Jensen, a professor at Georgetown University. \u201cIt\u2019s going to be fine sand in the gears and slow things down.\u201d<\/p>\n
Trump has promoted the tariffs as a way to reduce the persistent trade deficit. But importers sought to avoid the taxes by importing more goods before the taxes went into effect. As a result, the $582.7 billion trade imbalance for the first half of the year was 38% higher than in 2024. Total construction spending has dropped 2.9% over the past year.<\/p>\n
The economic pain isn\u2019t confined to the U.S. Germany, which sends 10% of its exports to the U.S. market, saw industrial production sag 1.9% in June as Trump\u2019s earlier rounds of tariff hikes took hold. \u201cThe new tariffs will clearly weigh on economic growth,\u201d said Carsten Brzeski, global chief of macro for ING bank. <\/p>\n
Dismay in India and Switzerland<\/p>\n
The lead-up to Thursday fit the slapdash nature of Trump\u2019s tariffs, which have been variously rolled out, walked back, delayed, increased, imposed by letter and frantically renegotiated. The process has been so muddled that officials for key trade partners were unclear at the start of the week whether the tariffs would begin Thursday or Friday. The language of the July 31 order to delay the start of tariffs from Aug. 1 only said the higher tax rates would start in seven days.<\/p>\n
Trump on Wednesday announced additional 25% tariffs to be imposed on India for its buying of Russian oil, bringing its total import taxes to 50%. <\/p>\n
A top body of Indian exporters said Thursday the latest U.S. tariffs will impact nearly 55% of the country\u2019s outbound shipments to America and force exporters to lose their long-standing clients.<\/p>\n
\u201cAbsorbing this sudden cost escalation is simply not viable. Margins are already thin,\u201d S.C. Ralhan, president of the Federation of Indian Export Organizations, said in a statement. <\/p>\n
The Swiss executive branch, the Federal Council, was expected to hold an extraordinary meeting Thursday after President Karin Keller-Sutter and other top Swiss officials returned from a hastily arranged trip to Washington in a failed bid to avert steep 39% U.S. tariffs on Swiss goods.<\/p>\n
Import taxes are still coming on pharmaceutical drugs, and Trump announced 100% tariffs on computer chips. That could leave the U.S. economy in a place of suspended animation as it awaits the impact.<\/p>\n
Stock market remains solid<\/p>\n
The president\u2019s use of a 1977 law to declare an economic emergency to impose the tariffs is also under challenge. The impending ruling from last week\u2019s hearing before a U.S. appeals court could cause Trump to find other legal justifications if judges say he exceeded his authority.<\/p>\n
Even people who worked with Trump during his first term are skeptical that things will go smoothly for the economy, such as Paul Ryan, the former Republican House speaker, who has emerged as a Trump critic.<\/p>\n
\u201cThere\u2019s no sort of rationale for this other than the president wanting to raise tariffs based upon his whims, his opinions,\u201d Ryan told CNBC on Wednesday. \u201cI think choppy waters are ahead because I think they\u2019re going to have some legal challenges.\u201d<\/p>\n
Trump is aware of the risk that courts could overturn his tariffs, prompting him to say on his Truth Social platform: \u201cTHE ONLY THING THAT CAN STOP AMERICA\u2019S GREATNESS WOULD BE A RADICAL LEFT COURT THAT WANTS TO SEE OUR COUNTRY FAIL!\u201d<\/p>\n
The stock market has been solid during the recent tariff drama, with the S&P 500 index climbing more than 25% from its April low. The market\u2019s rebound and the income tax cuts in Trump\u2019s tax and spending measures signed into law on July 4 have given the White House confidence that economic growth is bound to accelerate in the coming months.<\/p>\n
Global financial markets took Thursday\u2019s tariff adjustments in stride, with Asian and European shares and U.S. futures mostly higher. <\/p>\n
Brzeski warned: \u201cWhile financial markets seem to have grown numb to tariff announcements, let\u2019s not forget that their adverse effects on economies will gradually unfold over time.\u201d<\/p>\n
As of now, Trump still foresees an economic boom while the rest of the world and American voters wait nervously.<\/p>\n
\u201cThere\u2019s one person who can afford to be cavalier about the uncertainty that he\u2019s creating, and that\u2019s Donald Trump,\u201d said Rachel West, a senior fellow at The Century Foundation who worked in the Biden White House on labor policy. \u201cThe rest of Americans are already paying the price for that uncertainty.\u201d<\/p>\n
Boak writes for the Associated Press. <\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON\u00a0\u2014\u00a0President Donald Trump began levying higher import taxes on dozens of countries Thursday, just as the economic fallout…\n","protected":false},"author":2,"featured_media":65090,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[23,6484,47998,28,48000,48003,36831,47999,112,48002,5572,16153,16597,3479,3657,48001,2394],"class_list":["post-65089","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-america","tag-april","tag-broad-tariff","tag-business","tag-country-thursday","tag-economic-pain","tag-effect","tag-high-import-taxis","tag-markets","tag-new-taxis","tag-president","tag-thing","tag-thursday","tag-trump","tag-u-s-economy","tag-wednesday-afternoon","tag-year"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/65089","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=65089"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/65089\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/65090"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=65089"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=65089"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=65089"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}