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Rising Inflation Underscores Risks in Trump’s New Tariff Threats

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New data showing price increases last month could foreshadow even higher costs if the president imposes steep tariffs on Aug. 1.President Trump’s steep tariffs have started to weigh on consumers’ wallets, sending prices higher as the White House readies a more drastic — and potentially costly — expansion of its global trade war.The risks in Mr. Trump’s economic strategy began to show on Tuesday, with the release of data that found inflation had accelerated in June. Prices rose noticeably on appliances, clothing and furniture, products that are all heavily exposed to the president’s taxes on imports from Canada, China and other major trading partners.The inflation report undercut Mr. Trump’s continued assertions that Americans would not face financial repercussions from his increasingly aggressive trade brinkmanship. Since taking office, the president has imposed withering duties on allies and adversaries alike, with additional taxes on a range of products such as cars and steel.The latest reading of the Consumer Price Index recorded the first signs of what economists had predicted all along, with U.S. businesses and consumers shouldering a growing share of the burden from the taxes Mr. Trump has imposed on imports.The data also carried perhaps a new warning for the president as he prepares another round of tariffs on dozens of countries in about two weeks, including a 30 percent tax on the European Union. Some experts said that an uptick in inflation could foreshadow more significant price increases later, especially if Mr. Trump proceeds as planned.“Up until this report, you could have argued that inflation is on a journey lower,” said Padhraic Garvey, who leads ING’s research team for the Americas. “Now we are on a journey higher.”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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    Trump Adds 17% Tariff on Tomatoes From Mexico

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    The Trump administration is adding a 17 percent tariff to a year-round grocery store staple, while funneling more business to domestic tomato growers, largely in Florida.The Trump administration announced Monday that it would impose a 17 percent tariff on most imports of tomatoes from Mexico, as it withdrew from a decades-old trade agreement that had prevented those levies from snapping into place.The tariffs will add to the price of a year-round grocery store staple for many Americans, while funneling more business to domestic tomato growers, largely in Florida.The levies stem from a nearly 30-year-old trade case that found Mexican tomato growers to be selling their products in the United States at unfairly low prices. The U.S. tomato industry brought a case against their Mexican competitors in 1996, arguing that Mexican tomatoes dumped into the United States were injuring American growers. A U.S. trade court agreed with them, and ordered tariffs to be imposed.But on five occasions since then — in 1996, 2002, 2008, 2013 and 2019 — the United States agreed to suspend the tariffs, as long as Mexican growers would keep their prices above a certain minimum level. The United States and Mexico had been in recent talks about entering into a new agreement.“Mexico remains one of our greatest allies, but for far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes,” Howard Lutnick, the secretary of commerce, said in a statement. “That ends today. This rule change is in line with President Trump’s trade policies and approach with Mexico.”The 17 percent duty is calculated to measure the percentage by which Mexican tomatoes have been sold in the United States at unfair prices, the Commerce Department said. The United States imported $2.8 billion of tomatoes from Mexico in 2023, according to data from the World Bank, representing more than 85 percent of American imports.The Fresh Produce Association of the Americas, which represents companies that import and sell produce and flowers, said it was “disappointed” in the decision. It said that its members distributed vine-ripened, greenhouse-grown tomatoes from Mexico that are not replaceable by tomatoes grown in Florida and the Southeast, most of which are grown in an open field, picked green and gassed to induce a color change.“As an industry, we are saddened that American consumers will have to pay a tomato tax, or duty, for a reduced selection of the tomatoes they prefer,” the group said.Robert Guenther, the executive vice president of the Florida Tomato Exchange, said that the previous five agreements with Mexico had failed, and that strong enforcement of U.S. trade laws was needed to protect “the stability of our food supply chain.”“This decision will protect hardworking American tomato growers from unfair Mexican trading practices and send a strong signal that the Trump administration is committed to ensuring fair markets for American agriculture,” he said. More

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    in Economy

    It’s No Bluff: The Tariff Rate Is Soaring Under Trump

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    The president has earned a reputation for bluffing on tariffs. But he has steadily and dramatically raised U.S. tariffs, transforming global trade.President Trump’s on-again, off-again tariffs have prompted investors to bet that he will “always chicken out” and given businesses and foreign leaders hope that the leader of the world’s largest economy will ultimately back down from his threats if they prove too economically disruptive.Events of the past week have cast serious doubt on that bet. As Mr. Trump renews trade threats against more than two dozen trading partners, he is once again proving his fondness for tariffs, and embracing import taxes in a way that no other president has since the Great Depression.A self-described “tariff man,” Mr. Trump has continually extolled the virtues of heavily taxing imports as a way to raise revenue and cajole factories to relocate to the United States. While the president may ultimately give way on some of his most recent threats, he has still steadily and dramatically raised tariffs to levels not seen in a century.Over the past week, Mr. Trump has threatened 25 trading partners with punishing levies on Aug. 1 unless they sign trade deals that Mr. Trump finds acceptable. The list of countries he plans to raise tariffs on include some of America’s biggest sources of imports, including the European Union, Japan, Mexico, Brazil, South Korea and Thailand. Those countries had been in active talks with the United States about resolving Mr. Trump’s concerns in an effort to avoid tariffs.Several may still reach deals to avert some of the levies, including India, the European Union, Taiwan and Japan.But even if some deals are reached, American tariffs on trading partners are still likely to rise significantly. That was the case with the two trade agreement frameworks that the Trump administration has so far announced, with Britain and Vietnam, both of which leave double-digit tariffs in place.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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    Trump Takes Reins on U.S. Economy With Policy Bill and Tariffs Renewal

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    His expensive tax cuts have been signed into law. His steep global tariffs are taking clearer shape. And his twin campaigns to deregulate government and deport immigrants are well underway.With the major components of his agenda now coming into focus, President Trump has already left an indelible mark on the U.S. economy. The triumphs and turbulence that may soon arise will squarely belong to him.Not even six months into his second term, Mr. Trump has forged ahead with the grand and potentially disruptive economic experiment that he first previewed during the 2024 campaign. His actions in recent weeks have staked the future of the nation’s finances — and its centuries-old trading relationships — on a belief that many economists’ most dire warnings are wrong.Last week, the president enacted a sprawling set of tax cuts that he believes to be the ingredients for rapid economic growth, even as fiscal experts warned that the law may injure the poor while putting the U.S. government on a risky new fiscal path.Then, on Monday, Mr. Trump began to issue his latest round of tariff threats, insisting that “we’re done” negotiating as economists warned about a potential surge in consumer prices that could arise from taxing imports.The White House also proceeded with its aggressive and legally contested plans to eliminate scores of federal regulations and deport millions of migrants. The immigration crackdown, in particular, could come to the detriment of many sectors, like agriculture, that rely heavily on foreign labor, experts believe.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

  • 125 Shares99 Views

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    White House Faces Risk of Economic Fallout From Iran Strike

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    President Trump, aware of how high gas prices could affect his popularity, demanded on social media that the U.S. “KEEP OIL PRICES DOWN.”President Trump on Monday began to confront the potential economic blowback from his military strikes on Iran, which threatened to send oil and gas prices soaring at a moment when U.S. consumers are already facing significant financial strains.The mere prospect of rising energy costs appeared to spook even Mr. Trump, who took to social media to push for more domestic drilling while demanding that companies “KEEP OIL PRICES DOWN”; otherwise, they would be “PLAYING RIGHT INTO THE HANDS OF THE ENEMY.”“I’M WATCHING!” the president added.By midday Monday, global oil markets appeared relatively muted, two days after Mr. Trump dispatched U.S. bombers on a mission to disable three Iranian nuclear sites. Prices rose over the weekend before ultimately settling, as Washington — and the rest of the world — braced for the possibility that Tehran may still retaliate.In one worst-case scenario, Iranian leaders could look to shutter or otherwise impede access to the Strait of Hormuz, the narrow waterway that serves as the critical entrance point to the Persian Gulf. The world ships substantial amounts of oil and liquefied natural gas through the passage, so any interruption to commerce could cause energy prices to surge globally.A spike in energy costs could prove especially difficult for American consumers and businesses this summer, given that it could arrive at about the same time that Mr. Trump plans to revive his expansive, steep tariffs on nearly every U.S. trading partner. Many economists expect those levies to push up prices after years of high inflation.In April, the president announced, then suspended, those sky-high duties, seeking to quell a global market meltdown over his disruptive and legally contested campaign to remake global trade. But Mr. Trump has not wavered in his plan to implement the tariffs on July 9, and many economists expect companies — which pay the duties when they source foreign products — to pass the added costs down to their customers.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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    How Trump’s Trade War Has Whipsawed the Port of L.A.

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    Normally, the towering green crane in the Everport Terminal at the Port of Los Angeles would be busy unloading hulking container ships. Longshoremen below would flit around in “bomb carts” used to ferry containers from the ship. Big rigs would carry off imported furniture, car parts and clothing to other parts of the country.But on a recent Thursday morning, the 300-foot crane sat idle, a casualty of the tariffs that President Trump has imposed to curb foreign trade. Almost a fifth of the 99 boats that Gene Seroka, the port’s chief executive, had expected to arrive in May were canceled.“It’s a very quiet day,” Mr. Seroka said. “This is the impact that the tariffs have had.”Listen to our reporter’s commentaryAna Swanson visited the Port of Los Angeles last month and found it to be unusually quiet. The job posting board showed 40 percent fewer positions than normal. And the port was running at 70 percent of normal capacity, according to its chief executive.The Port of Los Angeles, along with a nearby facility in Long Beach, makes up a shipping complex that stretches across nearly 75 miles of Southern California shoreline. The ports are a bellwether for trade and the U.S. economy. Together, they move an astonishing 40 percent of the goods that come into the United States via containers. They also account for 30 percent of what the country exports.As Mr. Trump’s chaotic and aggressive tariff strategy has seesawed this year, activity here has, too. That has threatened the livelihood of the roughly 100,000 workers at the port complex and complicated life for the hundreds of thousands of companies that bring goods through the port each year. The trends at the port hint at the pain that will ripple through the broader economy in the coming months, as fewer and higher-priced goods travel from ports and warehouses to American stores and consumers.The ports experienced a surge of activity this year when shippers rushed to bring in goods ahead of tariffs that reached their highest levels in a century. That rush has faded, and trade has become more sluggish. With higher tariffs set to snap back within weeks, both importers and port workers remain cautious, unsure of what their futures will hold.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

  • 113 Shares149 Views

    in Economy

    Where’s the Inflation From Tariffs? Just Wait, Economists Say.

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    Are predictions for a jump in consumer prices too early, or just wrong?Tariffs raise consumer prices. It’s a view held by most economists since long before President Trump entered the White House.Prices rose when Mr. Trump imposed levies on China in his first term, though that did not translate to noticeably higher inflation overall. Forecasters have been bracing for months for it to happen again on a much larger scale, given that his tariffs this time are substantially larger and more widespread.But data released this week showed that inflationary pressures remained more muted than expected at this stage, raising an uncomfortable question for economists: Are their predictions wrong?Economists are undeterred — for now. It’s not that tariffs aren’t affecting prices, they say. It’s that this isn’t happening in a significant enough way just yet to show up in broad measures of inflation like the Consumer Price Index. They argue that the impact will be much more significant this summer.“Inflation is very likely going to increase,” said Marc Giannoni, chief U.S. economist at Barclays, who formerly worked at the Federal Reserve’s regional banks in Dallas and New York. “It is a question of time, not so much of if.”Mr. Trump’s tariffs have already rippled through the economy in several ways.Businesses rushed to stock up on products before levies were imposed, and now imports of foreign goods are down sharply. Uncertainty has skyrocketed, stoked by the administration’s frequent pivots on its trade policy. On Thursday, it announced that steel tariffs would soon apply to appliances made with the metal, including dishwashers, washing machines and refrigerators. More

  • 125 Shares129 Views

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    As Trump’s Tariffs Reshape Trade, Businesses Struggle With Economic Uncertainty

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    At the worst point of the labor shortage that emerged in the wake of the Covid-19 lockdowns, Thunderdome Restaurant Group had 100 people sign up for a job interview and only 15 show up. Of the two workers it hired, one never came in.The job market has cooled significantly since then, and Joe Lanni, who runs the Cincinnati-based company with his brother, now faces a different dilemma: how to grow the business, which has over 50 locations, while controlling costs as concerns about the economy spread.So they’re rethinking menu items like freshly made tortillas that require a dedicated full-time worker. They are also planning to shutter a handful of locations where sales have been softest, while adding more outposts of their fast casual restaurants that are doing well.Uncertainty about the economy has skyrocketed as President Trump has begun to radically reshape the global trading system with tariffs, cut off a crucial supply of workers with an immigration crackdown and floated big changes to the rules and regulations that govern how businesses operate. Consumers, who fuel the American economy, have become more hesitant to spend, and according to recent surveys, both the services and manufacturing sectors are slowing.But the economy does not appear to be at the cliff’s edge just yet, and employers like Mr. Lanni don’t want to be too cautious and miss out on opportunities.As his restaurants gear up for outdoor service this summer, Mr. Lanni said, he still expects head count across the company to swell by about 200 people, to around 1,500 employees, before receding in the fall. The stakes are high, however.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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    U.S. Trade Deficit Plummets in April

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    U.S. trade fell sharply as President Trump’s global tariffs began to weigh on imports.The U.S. trade deficit in goods and services narrowed sharply in April, falling to $61.6 billion compared with$138.3 billion in March as tariffs clamped down on global trade.U.S. goods imports fell significantly in April, dropping by 16.3 percent from March, the data released from the Commerce Department showed, as tariffs on exports from China and other countries weighed on trade. The sharp drop reflected the fact that importers had rushed to bring many goods into the United States at the beginning of the year to get ahead of tariffs ordered by President Trump.Exports rose slightly, up 3 percent from the previous month.Mr. Trump has imposed tariffs on a variety of industries and trading partners since coming into office in January, raising the U.S. tariff rate to levels not seen in a century. The president has temporarily suspended some of the tariffs to allow for trade negotiations, but many are set to snap back into effect in early July unless deals are reached.“The big swing in the trade deficit reflects the global trade war,” said Mark Zandi, the chief economist at Moody’s Analytics. “With the tariffs, goods imports collapsed in April, leading to a much smaller trade deficit.” Mr. Zandi added that a smaller trade deficit would likely result in higher gross domestic product in the second quarter, since a trade deficit is subtracted from that figure. But he cautioned that the tariffs would still have negative consequences for American consumers and the economy.“The higher U.S. tariffs have severely disrupted global trade, which will soon show up as higher prices for many of the goods Americans buy, weighing heavily on their purchasing power and spending, and by extension, the broader economy,” he said. More