by Businesses and international leaders expect that President Trump will eventually back down from his threats if they prove to be too disruptive to the economy, as a result of his on-again, off-again tariffs, which have caused investors to wager that he will always chicken out.
The previous week’s events have seriously called into question that wager. Mr. Trump is once again demonstrating his love for tariffs and supporting import taxes in a manner that no other president since the Great Depression has done as he renews trade threats against over two dozen trading partners.
Mr. Trump, a self-described tariff man, has consistently praised the benefits of imposing high import taxes as a means of generating income and luring American manufacturers to relocate. The president has increased tariffs drastically and gradually to levels not seen in a century, even though he may eventually back down from some of his most recent threats.
In the last week, Mr. Trump has threatened to impose punitive taxes on 25 trading partners on August 1st unless they agree to trade agreements that he deems acceptable. Some of America’s largest import suppliers, such as the European Union, Japan, Mexico, Brazil, South Korea, and Thailand, are on the list of nations he intends to impose higher tariffs on. In an attempt to avoid tariffs, those nations had been actively negotiating with the US to address Mr. Trump’s concerns.
A number of countries, including Taiwan, Japan, the European Union, and India, may still come to agreements to avoid some of the tariffs.
However, U.S. tariffs on trading partners are still expected to increase dramatically even if some agreements are made. This was true of the two trade agreement frameworks with Vietnam and Britain that the Trump administration has so far outlined, both of which maintain double-digit tariffs.
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