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    Trump’s Tariffs Will Wound Free Trade, but the Blow May Not Be Fatal

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    Free trade has been so beneficial to so many countries that the world may find a way to live without its biggest player.President Trump’s self-proclaimed “liberation day,” in which he announced across-the-board tariffs on the United States’ trading partners, carries an echo of another moment when an advanced Western economy threw up walls around itself.Like Brexit, Britain’s fateful vote nearly nine years ago to leave the European Union, Mr. Trump’s tariffs struck a hammer blow at the established order. Pulling the United States out of the global economy is not unlike Britain withdrawing from a Europe-wide trading bloc, and in the view of Brexiteers, a comparable act of liberation.The shock of Mr. Trump’s move is reverberating even more widely, given the larger size of the American economy and its place at the fulcrum of global commerce. Yet as with Brexit, its ultimate impact is unsettled: Mr. Trump could yet reverse himself, chastened by plummeting markets or mollified by one-off deals.More important, economists say, the rise of free trade may be irreversible, its benefits so powerful that the rest of the world finds a way to keep the system going, even without its central player. For all of the setbacks to trade liberalization, and the grievances expressed in Mr. Trump’s actions, the barriers have kept falling.The European Union, optimists point out, did not unravel after Britain’s departure. These days, the political talk in London is about ways in which Britain can draw closer to its European neighbors. Still, that sense of possibility has come only after years of turbulence. Economists expect similar chaos to buffet the global trading system as a result of Mr. Trump’s theatrical exit.“It will not be the end of free trade, but it is certainly a retreat from unfettered free trade, which is the way the world seemed to be going,” said Eswar S. Prasad, a professor of trade policy at Cornell University. “Logically, this would be a time when the rest of the world bands together to promote free trade among themselves,” he said. “The reality is, it’s going to be every country for itself.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 150 Shares159 Views

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    Small Businesses Face a ‘Tornado’ of Challenges: Cuts, Freezes and Now Tariffs

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    President Trump vowed to aid entrepreneurs by reducing taxes and slicing red tape. But some owners say other policies have put them at a disadvantage.It was a bad week for Ben Coryell, who runs a wilderness guiding company in Golden, Colo.He got several calls from customers who wanted to cancel their climbing courses and mountaineering expeditions over the summer, often citing second thoughts about big purchases as the Trump administration has thrown the economy into turmoil with eye-watering tariffs.At the same time, Mr. Coryell is wondering how long his business, Golden Mountain Guides, can continue to offer those trips, as personnel cuts at the National Park Service have held up the processing of the permits he needs to operate along high-demand routes. And with those cuts leaving fewer rangers on patrol, he fears that unlicensed operators could run amok.So far he hasn’t laid anyone off, but it seems increasingly likely that he may have to.“It’s really starting to feel like a lot of the operations we’ve depended on might have to be bumped for the next number of years until we can find a healthy status quo,” he said.Helmets on display at Golden Mountain Guides.Rachel Woolf for The New York TimesThousands of entrepreneurs are finding themselves in similar positions as they confront the blizzard of changes from Washington over the last two and a half months. Funding freezes, staffing cuts to federal agencies and an immigration crackdown — along with, of course, tariffs — are throwing many into turmoil, with little certainty about how to proceed.“It’s feeling like a tornado to small-business owners,” said Natalie Madeira Cofield, chief executive of the Association for Enterprise Opportunity, which supports initiatives to help companies with fewer than 10 employees. “This is an unprecedented moment.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Lesotho, a Small African Nation, Expects a Big Hit From Trump’s Tariffs

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    The amount of manufactured goods exported from Africa to the United States is minuscule. But for Lesotho, the impact of a stunning 50 percent tariff is enormous.The nation that the Trump administration slapped with the heftiest tariff this week is a small, rural, landlocked country in southern Africa that is among the world’s poorest.Lesotho, which makes denim that goes into American-branded jeans, was hit with a 50 percent tariff. It was among several lower-income countries on the continent that were shocked by levies high above the minimum 10 percent imposed on nearly all of America’s trading partners. Madagascar, where three-quarters of the population lives in poverty, now will be met with a 47 percent tariff when its apparel, vanilla and other exports enter the United States.Products from Algeria, Angola, Botswana, Libya and Mauritius all now have tariffs above 30 percent, as does South Africa, which has come under particular attack by the Trump administration.Mr. Trump has justified the across-the-board tariffs by declaring that the world trading system has played the United States for a chump who picked up the tab for the world’s moochers.But Lesotho is hardly a big player in global trade: It imported less than $3 million in goods from the United States and exported $240 million there last year.The tariffs come as much of the African continent is already reeling. Just weeks ago, the Trump administration ended billions of dollars in aid to Africa that undergirded many countries’ health care systems and disaster relief efforts.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    7 Americans Weigh In on Trump’s Sweeping Tariffs

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    President Trump unveiled sweeping tariffs this week on dozens of countries, with some of the steepest tariffs levied on some of America’s biggest trading partners. The move, arguably the most far-reaching of his second term so far, sent stocks into a nosedive and substantially raised the prospect of a recession.Voters were bracing for the effects in their own lives, but some said they were, for now, waiting and watching to see how all of this plays out.— More

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    Republicans Like to Cut Taxes. With Tariffs, Trump Is Raising Them.

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    President Trump’s tariffs are scrambling the Republican plan for the economy, long centered on tax cuts and growth.The Republican Party embarked this week on a haphazard experiment in economic policymaking, wagering that the United States can weather a monumental tax increase in the form of broad tariffs on imported goods as long as Congress also cuts taxes on income.It’s a mash-up that many investors, economists and even some G.O.P. lawmakers expect to be a failure.“I always think that with gambling, at least you have a chance of winning. This is worse than that,” Douglas Holtz-Eakin, a conservative economist who worked for former President George W. Bush, said. “This is betting with the mafia. You’re going to lose.”President Trump’s plan to charge at least a 10 percent tariff on nearly all imports into the United States — along with much higher rates on goods from many countries — is the culmination of his quest to force companies to manufacture domestically, even if it comes at the expense of a relatively strong economy. Because tariffs are a type of taxation, Mr. Trump’s plan is among the largest tax increases in decades, analysts say, a policy change that sent the stock market reeling, paralyzed corporate investment and shoved the economy closer to a recession.At the same time, Republicans on Capitol Hill are plowing forward with legislation that would lock in lower taxes for American individuals and companies. There’s diminishing hope among Republicans that those cuts can make up for drag created by the tariffs. Some of Mr. Trump’s allies and tax cut enthusiasts, like Stephen Moore, his former economic adviser, have been begging the president for “more tax cuts and less tariffs, please.”Of course, Mr. Trump and the White House argue that tariffs are not taxes on Americans, but rather on foreign companies that will have to lower their prices to maintain access to the U.S. market. Mainstream economists have consistently found that tariffs raise prices for American consumers and companies, including domestic manufacturers who import materials to turn into final products.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 138 Shares189 Views

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    Trump Is Defiant as Tariff Moves Roil Markets a Second Day

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    Two days after President Trump announced his expansive global tariffs, the United States confronted wide-ranging and painful blowback, as China retaliated against American goods and markets plummeted again on worries of a persistent, damaging trade war.No portion of the global economy appeared unscathed as the world braced for Mr. Trump to begin imposing his nearly across-the-board taxes on imports Saturday, marking the first salvo in a potentially costly trade conflict that the president has vigorously defended.China, which Mr. Trump has already hit with 20 percent tariffs, announced plans to retaliate. Beijing promised to impose a 34 percent tariff on American goods next week, including on agricultural products. China calibrated its tariffs to match Mr. Trump’s decision to add a 34 percent tax to Chinese imports.The tit-for-tat delivered a huge blow to financial markets, as Wall Street reckoned with the rising odds of an escalating global trade standoff. By the closing bell, the S&P 500 had fallen by almost 6 percent, pulling it closer into a bear market, a widely used Wall Street term for a decline of at least 20 percent from its peak. The tech-heavy Nasdaq fell 5.8 percent, pushing it into bear market territory.As China took aim at the United States, Ngozi Okonjo-Iweala, the director general of the World Trade Organization, warned on Friday against a “cycle of retaliatory measures that lead to further declines in trade.” In the United States, Jerome H. Powell, the chair of the Federal Reserve, struck his own downbeat note over the unpredictable trajectory of the economy.“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected,” Mr. Powell said. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Ted Cruz and Other Senate Republicans Question Trump’s Tariffs

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    Some Republican senators on Capitol Hill, including one of President Trump’s most ardent supporters, have signaled their uneasiness to the sweeping global tariffs that the president announced this week and that sent global markets reeling.Senator Ted Cruz, Republican of Texas, warned on Friday that a future where other countries slap retaliatory tariffs on U.S. goods, as China has already done, was a “very real possibility” and would be a “terrible outcome” for the country.“It’s terrible for America,” Mr. Cruz said on the latest episode of his podcast. “It would destroy jobs here at home and do real damage to the U.S. economy if we had tariffs everywhere.”Mr. Cruz also said that a trade war would likely push inflation up and burden consumers with higher costs.“I love President Trump. I’m his strongest supporter in the Senate,” Mr. Cruz said. “But here’s one thing to understand: A tariff is a tax, and it is a tax principally on American consumers.”Mr. Cruz’s comments came just two days after the Senate, in a largely symbolic move, voted to halt planned 25 percent levies on Canada. However, the bill is almost certain to die in the House — and even if it does not, Mr. Trump would be unlikely to sign it.Mr. Cruz was not among the Republican senators who joined all Democrats in pushing the bill through. They were Senator Lisa Murkowski of Alaska, Senator Susan Collins of Maine, and Senators Rand Paul and Mitch McConnell, both of Kentucky.On Thursday, another top Republican senator — Chuck Grassley of Iowa — teamed up with a Democrat to introduce a bill aiming to reclaim congressional authority over the implementation of tariffs.The bill, which Mr. Grassley co-sponsored with Senator Maria Cantwell, Democrat of Washington, would require the president to give Congress 48 hours notice of any new tariffs. Congress would then have to approve those tariffs within 60 days, or they would expire. Mr. Cruz was not a co-sponsor. More

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    Slumping Oil Prices Reflect Intensifying Economic Worries

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    Oil prices continued to fall on Friday, extending Thursday’s sharp drop. Brent crude, the international benchmark, traded at its lowest level in more than three years, below $65 a barrel, a fall of almost 8 percent.Fears that President Trump’s tariffs could slash global economic growth — and demand for oil as a result — were weighing on the market, analysts said.China’s announcement on Friday of 34 percent retaliatory tariffs against the United States has further stoked worries that demand for oil and other commodities could be throttled by the trade turmoil.Thursday’s surprise decision by a Saudi Arabia-led group of countries in the OPEC Plus cartel to accelerate planned production increases has added to the downward pressure. Essentially, the market is worried about a bearish mixture of tariffs weakening demand, compounded by growing pressure from oil-producing countries like Iraq and Kazakhstan to add to supplies.In a note to clients, analysts at Morgan Stanley said that in a recession — which is a looming possibility — demand growth for oil “typically falls at least to zero.” More