- A swath of President Trump's new trade tariffs went into effect Thursday.
- The levies impact over 60 countries and range from 10% to 50%.
- The new fees arrive amid a U.S. economy that's showing signs of slowing.
A swath of President Donald Trump’s reciprocal tariff declarations went into effect Thursday and the country’s chief executive, who has described himself as “Tariff Man”, took to social media Wednesday night to note the occasion.
“IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!,” Trump posted to Truth Social just before midnight.
In another posting earlier in the evening, the president said new tariffs were set to even the playing field of international trade and suggested the only factor that could slow down his economic agenda would be the “radical left” judicial system.
“RECIPROCAL TARIFFS TAKE EFFECT AT MIDNIGHT TONIGHT!,” Trump wrote. “BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA. THE ONLY THING THAT CAN STOP AMERICA’S GREATNESS WOULD BE A RADICAL LEFT COURT THAT WANTS TO SEE OUR COUNTRY FAIL!”
Trump has argued that tariffs are an effective tool to incentivize manufacturing goods in the U.S. as well as protecting jobs and encouraging consumers to purchase domestic-made products. He’s also leveraged tariff increases to address the flow of illicit drugs and illegal immigrants across U.S. borders.
But economists warn that the added cost of imports will ultimately be paid by U.S. consumers. And while recent federal economic reports have so far shown only minimal impacts on the cost of goods amid inflation that has creeped back up since the first of the year, the rash of new trade levies could end up driving future price increases.
Here are five things to know as the new tariffs go into effect:
What are the new tariffs?
Just after midnight, goods from more than 60 countries and the European Union became subject to tariff rates of at least 10% and ranging up to 50%. Goods from 39 countries, as well as the 27-member bloc of EU nations, now face trade fees of 15%. Import goods from 11 countries now have tariffs of 30% or more with Brazil seeing a top rate of 50%.
Earlier sector-specific tariffs also remain in place. Those include:
- 50% tariff on steel and aluminum imports
- 50% tariff on copper imports from 1 August
- 25% tariff on foreign-made cars and imported engines and other car parts
There are also a number of tariff exemptions including, most notably, smartphones. Some import goods that include components made in the U.S. are also protected from tariff fees as are pharmaceutical products, though Trump has signaled that he’s considering a new levy on that sector.
How do new trade deals figure in?
Trump has announced eight new international trade deals since the start of his second term though only two have been formalized, with the UK and China. The China deal, however, negotiated amid a brewing Sino-U.S. trade war that saw tariff rates on both sides briefly escalate past the 100% mark earlier this year, is set to expire Aug. 12.
Most of the deals include investment and/or purchase agreements in addition to setting tariff rates. The most recent example is a potential U.S.-EU trade deal that includes a promise that EU companies will purchase $750 billion worth of natural gas, oil and nuclear fuel over three years to replace Russian energy supplies that Europe is seeking to exit as well as an additional $600 billion in U.S. investments, though that part of the agreement is not legally binding.
Where is all the new tariff revenue going?
The U.S. collected some $30 billion in tariff fees last month, a collection rate that is more than 240% higher than last July, according to the U.S. Treasury Department.
Since April, the U.S. has collected $100 billion in tariff fees, more than three times the amount collected in the same four months a year ago, according to a report from CNN.
Trump has suggested using the funds to pay down the country’s debt, currently north of $37 trillion, or even sending tariff “rebate” checks to U.S. taxpayers, though neither action has taken place.
What’s going on with the U.S. economy as tariffs kick in?
A slew of recent indicators suggest the U.S. economy is on a cooling trend.
Prices on goods and services increased at a 2.7% annual rate in June, ratcheting up from May’s 2.4% according to the latest Consumer Price Index report from the Labor Department. Prices moved up 0.3% on a monthly basis in June as overall inflation, which had been mostly moving down since a January reading of 3.0%, hit its highest level since February.
Core inflation, a measure that strips out volatile food and energy prices, hit an annual rate of 2.9% in June, up 0.2% from May to June.
Last week’s monthly jobs report showed hiring slowed to 73,000 positions in July, falling well short of the expected 100,000 and the report included sizable revisions to figures from the previous two months. Those adjustments reduced May and June new hire figures by 258,000, and raised the ire of Trump who called the data “rigged” and led to him firing the head of the Bureau of Labor Statistics last Friday.
Growth in the U.S. gross domestic product, a measure of the total value of goods and services produced in the country, slowed significantly in the first half of the year compared to the last two years, according to a report released last week.
How do voters feel about Trump’s tariff strategy?
Recent polling conducted by the Deseret News in partnership with the University of Utah’s Hinckley Institute of Politics found Utahns have mixed feelings when it comes to the president’s handling of inflation.
In a statewide online survey conducted in May, pollsters asked, “Do you approve or disapprove of the job Donald Trump is doing handling inflation?”
Overall results were essentially split with 50% of poll participants saying they somewhat or strongly approve and 43% falling into the somewhat or strongly disapprove camp. But that apparent equanimity dissolves when the responses are parsed by political affiliation.
Some 70% of Republican respondents versus 19% of Democrats weighed-in as somewhat or strongly approving of Trump’s work on inflation. On the flip side, only 22% of Republicans said they somewhat or strongly disapproved of Trump’s inflation tactics, against 81% of Democrats who participated in the poll.
The respondents when asked “Has inflation during the Trump administration gotten better, worse or stayed the same?” were, again, nearly evenly distributed among the poll participants, outside the lens of politics.
Overall, 31% of respondents said inflation has gotten better since Trump took office, 36% said worse and 33% said inflation was about the same.
When flying their party colors, 41% of Republicans versus 14% of Democrats said inflation was better so far in Trump’s second term, while 19% of Republicans next to 70% of Democrats believe inflation has become worse. For those who told surveyors that inflation from their perspective has stayed the same since Jan. 20, 40% were Republicans and 17% were Democrats.