Trump Injects Uncertainty in Tariffs   08/01 06:10

   When Trump signed the order Thursday night imposing new tariffs on 66 
countries, the European Union, Taiwan and the Falkland Islands, the start date 
of the punishing import taxes was pushed back seven days so that the tariff 
schedule could be updated.

   WASHINGTON (AP) -- For weeks, President Donald Trump was promising the world 
economy would change on Friday with his new tariffs in place. It was an 
ironclad deadline, administration officials assured the public.

   But when Trump signed the order Thursday night imposing new tariffs on 66 
countries, the European Union, Taiwan and the Falkland Islands, the start date 
of the punishing import taxes was pushed back seven days so that the tariff 
schedule could be updated. The change -- while potentially welcome news to 
countries that had not yet reached a deal with the U.S. -- injected a new dose 
of uncertainty for consumers and businesses still wondering what's going to 
happen and when.

   Trump told NBC News in a Thursday night interview the tariffs process was 
going "very well, very smooth." But even as the Republican president insisted 
these new rates would stay in place, he added: "It doesn't mean that somebody 
doesn't come along in four weeks and say we can make some kind of a deal."

   Trump has promised that his tax hikes on the nearly $3 trillion in goods 
imported to the United States will usher in newfound wealth, launch a cavalcade 
of new factory jobs, reduce the budget deficits and, simply, get other 
countries to treat America with more respect.

   The vast tariffs risk jeopardizing America's global standing as allies feel 
forced into unfriendly deals. As taxes on the raw materials used by U.S. 
factories and basic goods, the tariffs also threaten to create new inflationary 
pressures and hamper economic growth -- concerns the Trump White House has 
dismissed.

   Questions swirl around the tariffs despite Trump's eagerness

   As the clock ticked toward Trump's self-imposed deadline, few things seemed 
to be settled other than the president's determination to levy the taxes he has 
talked about for decades. The very legality of the tariffs remains an open 
question as a U.S. appeals court on Thursday heard arguments on whether Trump 
had exceeded his authority by declaring an "emergency" under a 1977 law to 
charge the tariffs, allowing him to avoid congressional approval.

   Trump was ebullient as much of the world awaited what he would do.

   "Tariffs are making America GREAT & RICH Again," he said Thursday morning on 
Truth Social.

   Others saw a policy carelessly constructed by the U.S. president, one that 
could impose harms gradually over time that would erode America's power and 
prosperity.

   "The only things we'll know for sure on Friday morning are that 
growth-sapping U.S. import taxes will be historically high and complex, and 
that, because these deals are so vague and unfinished, policy uncertainty will 
remain very elevated," said Scott Lincicome, a vice president of economics at 
the Cato Institute. "The rest is very much TBD."

   The new tariffs build off ones announced in the spring

   Trump initially imposed the Friday deadline after his previous "Liberation 
Day" tariffs in April resulted in a stock market panic. His unusually high 
tariff rates unveiled then led to recession fears, prompting Trump to impose a 
90-day negotiating period. When he was unable to create enough trade deals with 
other countries, he extended the timeline and sent out letters to world leaders 
that simply listed rates, prompting a slew of hasty agreements.

   Swiss imports will now be taxed at a higher rate, 39%, than the 31% Trump 
threatened in April, while Liechtenstein saw its rate slashed from 37% to 15%. 
Countries not listed in the Thursday night order would be charged a baseline 
10% tariff.

   Trump negotiated trade frameworks over the past few weeks with the EU, 
Japan, South Korea, Indonesia and the Philippines -- allowing the president to 
claim victories as other nations sought to limit his threat of charging even 
higher tariff rates. He said on Thursday there were agreements with other 
countries, but he declined to name them.

   Thursday began with a palpable sense of tension

   The EU was awaiting a written agreement on its 15% tariff deal. Switzerland 
and Norway were among the dozens of countries that did not know what their 
tariff rate would be, while Trump agreed after a Thursday morning phone call to 
keep Mexico's tariffs at 25% for a 90-day negotiating period. The president 
separately on Thursday amended an order to raise Canada's fentanyl-related 
tariffs to 35%.

   European leaders face blowback for seeming to cave to Trump, even as they 
insist that this is merely the start of talks and stress the importance of 
maintaining America's support of Ukraine's fight against Russia. Canadian Prime 
Minister Mark Carney has already indicated that his country can no longer rely 
on the U.S. as an ally, and Trump declined to talk to him on Thursday.

   India, with its 25% tariff announced Wednesday by Trump, may no longer 
benefit as much from efforts to pivot manufacturing out of China. While the 
Trump administration has sought to challenge China's manufacturing dominance, 
it is separately in extended trade talks with that country, which faces a 30% 
tariff and is charging a 10% retaliatory rate on the U.S.

   Major companies came into the week warning that tariffs would begin to 
squeeze them financially. Ford Motor Co. said it anticipated a net $2 billion 
hit to earnings this year from tariffs. French skincare company Yon-Ka is 
warning of job freezes, scaled-back investment and rising prices.

   It's unclear whether Trump's new tariffs will survive a legal challenge

   Federal judges sounded skeptical Thursday about Trump's use of a 1977 law to 
declare the long-standing U.S. trade deficit a national emergency that 
justifies tariffs on almost every country on Earth.

   "You're asking for an unbounded authority," Judge Todd Hughes of the U.S. 
Court of Appeals for the Federal Circuit told a Justice Department lawyer 
representing the administration.

   The judges didn't immediately rule, and the case is expected to eventually 
reach the Supreme Court.

   The Trump White House has pointed to the increase in federal revenues as a 
sign that the tariffs will reduce the budget deficit, with $127 billion in 
customs and duties collected so far this year -- about $70 billion more than 
last year.

   New tariffs threaten to raise inflation rates

   There are not yet signs that tariffs will lead to more domestic 
manufacturing jobs, and the U.S. economy now has 14,000 fewer manufacturing 
jobs than it did in April.

   On Thursday, one crucial measure of inflation, known as the Personal 
Consumption Expenditures index, showed that prices have climbed 2.6% over the 
12 months that ended in June, a sign that inflation may be accelerating as the 
tariffs flow through the economy.

   The prospect of higher inflation from the tariffs has caused the Federal 
Reserve to hold off on additional cuts to its benchmark rates, a point of 
frustration for Trump, who on Truth Social, called Fed Chair Jerome Powell a 
"TOTAL LOSER."

   But ahead of Trump's tariffs, Powell seemed to suggest that the tariffs had 
put the U.S. economy and much of the world into a state of unknowns.

   "There are many uncertainties left to resolve," Powell told reporters 
Wednesday. "So, yes, we are learning more and more. It doesn't feel like we're 
very close to the end of that process. And that's not for us to judge, but it 
does -- it feels like there's much more to come."