ReportWire

Tag: Tariffs and global trade

  • FACT FOCUS: Trump blames Biden for the agricultural trade deficit. It’s not that simple

    [ad_1]

    As President Donald Trump announced a $12 billion farm aid package this week to help U.S. farmers hurt by tariffs, he placed responsibility for the U.S. agricultural trade deficit on former President Joe Biden.

    But in casting blame elsewhere, he is ignoring other factors, including his own role. Currently, farmers — especially those that produce soybeans and sorghum — have had a hard time selling their crops while getting hit by increasing costs after Trump raised tariffs on China earlier this year as part of a broader trade war that has contributed to the deficit.

    Experts say that it is a massive oversimplification to blame any one administration or policy.

    Here’s a closer look at the facts.

    CLAIM: There was an agricultural trade surplus during Trump’s first term that former Biden turned into an agricultural trade deficit.

    THE FACTS: This is both misleading and missing context. It is true that there was an agricultural trade surplus when Trump entered the White House in 2017, which has since become a significant deficit. However, according to experts, this can be attributed to actions taken by both administrations, as well as factors outside their control such as the COVID-19 pandemic.

    “I don’t want to let U.S. trade policy off the hook here, but it’s one element of a broader, more complicated kind of story,” said Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics.

    Still, Trump held Biden solely responsible for the agricultural trade deficit at a White House roundtable Monday where he announced the farm aid package.

    “In my first term, we had an agricultural trade surplus by a lot,” the president said, misrepresenting the numbers. “We had a big surplus. We knew we were exporting American agricultural products all over the world, making a net profit and, in many cases, a very substantial profit. He came in and ruined it. Biden turned that surplus into a gaping agricultural deficit that continues to this day.”

    What the numbers show

    The yearly agricultural trade balance, which reflects the amount of those goods the U.S. has exported versus the amount it has imported, had been positive for nearly 60 years until 2019 during Trump’s first term.

    According to data from the Department of Agriculture, it stood at a surplus of approximately $16.3 billion at the end of 2016 and fell the next year, Trump’s first as president, to one of about $13.66 billion. The balance further decreased over the next two years, ultimately turning into a deficit of about $481 million. It returned to a surplus in 2020 at about $3.39 billion, which further increased in 2021 — the year Biden entered the White House. In 2022, it transitioned back to a deficit that grew to approximately $36.45 billion by the end of 2024. As of August, the latest data available, there was an agricultural trade deficit of about $36.3 billion.

    The yearslong trade war between the U.S. and China is partly to blame for the agricultural deficit, experts say. Trump fired the first shot in January 2018, with 30% tariffs on imported solar panels, which led to additional tariffs and import curbs from both sides that continued to a certain extent under Biden.

    The countries signed a Phase One trade deal in January 2020 through which China committed to buying an additional $200 billion of U.S. goods and services over the next two years. However, the Peterson Institute later found China had bought essentially none of the goods promised.

    What is the current situation?

    Trump has instituted even more tariffs on Chinese imports since returning to the White House. In response, China has retaliated with tariffs and import curbs on U.S. goods, including key farm products.

    The White House said in October, after Trump met with Chinese leader Xi Jinping in South Korea, that Beijing had promised to buy at least 12 million metric tons of U.S. soybeans by the end of the calendar year, plus 25 million metric tons a year in each of the next three years. China has purchased more than 2.8 million metric tons of soybeans since Trump announced the agreement, according to AP reporting. That’s only about one quarter of what administration officials said China had promised, but Treasury Secretary Scott Bessent has said China is on track to meet its goal by the end of February, which is two months later than the White House originally promised.

    “China’s been refusing large U.S. purchases in favor of other trade partners,” said Hendrix. “This is a lamentable, but kind of predictable, consequence of the United States engaging in this trade war and weaponizing trade policy. Our trade partners are going to seek to diversify both for self-insurance — we’re talking about food, we’re talking about survival here — and to punish the U.S. for kind of changing the rules of the game so unilaterally.”

    But there are myriad other factors that have contributed to the current deficit, experts say. For example, high purchasing power enabled by a strong U.S. dollar and a desire by U.S. consumers to buy high-value goods that aren’t produced domestically. A stronger dollar also decreases demand for U.S. exports, as this makes it more difficult for other countries to buy those products.

    In addition, Brazil and Argentina have begun exporting soy, corn and beef, competing directly with U.S. exports and lowering prices for such goods. Major world events of which the U.S. government has little or indirect control, such as the COVID-19 pandemic, climate variability and the Russia-Ukraine war, have also contributed.

    “The tariffs can exacerbate the situation, but generally the fact that you may have a deficit or a surplus is really more dependent on global prices,” said Joseph Glauber, a senior fellow at the American Enterprise Institute who served as the Department of Agriculture’s chief economist from 2008 to 2014 under Presidents George W. Bush and Barack Obama.

    Asked whether Trump blames solely Biden for the agricultural trade deficit, White House spokeswoman Anna Kelly said that “farmers suffered for years under Joe Biden,” but that Trump is committed to “helping our agriculture industry by negotiating new trade deals to open new export markets for our farmers and boosting the farm safety net for the first time in a decade.”

    ___

    Find AP Fact Checks here: https://apnews.com/APFactCheck.

    [ad_2]

    Source link

  • FACT FOCUS: Trump says tariffs can eventually replace federal income taxes. Experts disagree

    [ad_1]

    President Donald Trump has long praised tariffs as key to increasing wealth in the United States, idealizing Gilded Age policies that preceded the implementation of a modern federal income tax.

    Among the potential benefits, Trump claims, is the ability to replace revenue from federal income taxes with money the U.S. is taking in from tariffs — a concept he has touted since his 2024 presidential campaign, most recently at a Cabinet meeting Tuesday.

    But tariff revenue doesn’t even come close to where it would need to be if federal income taxes were eliminated, and experts say such a plan isn’t at all feasible.

    Here’s a closer look at the facts.

    CLAIM: The U.S. is earning enough revenue from tariffs to eventually eliminate federal income taxes.

    THE FACTS: This is false. Individual income taxes brought in trillions more dollars than tariffs did in the last fiscal year, accounting for more than 50% of total U.S. revenue, according to Treasury Department data. Tariffs made up only 3.7% of the total. In the first month of the current fiscal year, which began Oct. 1, individual income taxes accounted for 54% of total revenue. Tariffs made up 7.75%.

    Trump’s proposal wouldn’t work regardless, according to experts, given the unreliability of tariff revenue as well as the harmful effects of tariffs on economic growth and their outsize impact on lower earners.

    “It’s not possible. It’s not feasible mathematically or economically,” said Brandon DeBot, senior attorney adviser and policy director at New York University’s Tax Law Center. “And analysts from a range of different perspectives agree with that conclusion. Even the very substantial tariffs imposed this year, which are at the highest levels in the postwar era, raise nowhere near the revenue that income tax does.”

    Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy, called the idea “nonsensical.”

    But Trump has floated it twice in the last week — first during remarks on Thanksgiving at Mar-a-Lago and then again at Tuesday’s Cabinet meeting.

    “And I believe that at some point in the not too distant future, you won’t even have income tax to pay. Because the money we’re taking in is so great, it’s so enormous, that you’re not going to have income tax to pay,” he said at the meeting, which lasted more than two hours.

    The numbers don’t add up

    In the last fiscal year, Treasury Department data shows that revenue from individual income taxes was approximately $2.66 trillion out of about $5.23 trillion in total revenue. Corporation income taxes added approximately $452 billion. Customs duties earned nearly $195 billion. That’s a difference of around $2.8 trillion.

    The current fiscal year is shaping up in a similar fashion. Individual income taxes took in about $217 billion out of approximately $404 billion in total revenue the first month, with about $15 billion in additional funds from corporation taxes. Tariffs, meanwhile, earned around $31 billion.

    Trump has boasted of additional income from investments in the U.S. by other countries and international companies. But the precise terms of these investments have yet to be fully codified and released to the public, and some numbers are under dispute or involve potentially fuzzy math.

    The modern federal income tax was created with the ratification of 16th Amendment in 1913, ending the 43-year era when Trump says the country was wealthiest. He has not expressly detailed plans to end a national income tax since retaking the White House, and he can’t do so without an act of Congress and upending the federal budget.

    “President Trump is set to raise trillions in revenue for the federal government in the coming years with his tariffs — whose costs will ultimately be paid by the foreign exporters who rely on the American economy, the world’s biggest and best consumer market,” said White House spokesman Kush Desai. He also cited “trillions in historic investment commitments to make and hire in America” that have been fueled by tariffs.

    It is actually importers — American companies — that pay tariffs. Those companies typically pass their higher costs on to their customers in the form of higher prices. Still, tariffs can hurt foreign countries by making their products pricier and harder to sell abroad. Foreign companies might have to cut prices — and sacrifice profits — to offset the tariffs and try to maintain their market share in the United States.

    A burden on lower-income households

    Even if the numbers were made to add up, replacing revenue from federal income taxes with that of tariffs — a Republican talking point since the 1990s — poses many risks. Tariffs, especially at rates needed to make up for a loss in federal income taxes, could lead to retaliation from other countries and a lack of imports. In fact, revenue could start going down the more tariffs go up. There is also a lot of uncertainty about how much revenue tariffs will actually take in, given periodic changes to Trump’s policies.

    “We would be talking about living in a completely different world than the one we live in now,” said Wamhoff. “There was a time when the government’s finances were provided through tariffs. But I believe people were getting around with a horse and buggy back then and not cars. I mean, that was a completely different time.”

    Another reality is currently playing out. Trump’s tariffs are the subject of a Supreme Court case and could be struck down if the justices decide he does not have the authority to implement them. However, the president will still have plenty of options to keep taxing imports aggressively even if the courts rule against him. For example, he can reuse tariff powers he deployed in his first term and can reach for others, including one that dates back to the Great Depression. Many companies — including Costco — aren’t waiting for a decision from the Supreme Court. Instead, they’re filing suits against the Trump administration demanding refunds on the tariffs they’ve paid.

    Experts say there is also an issue of fairness, noting that tariffs would shift the tax burden to lower-income households given their propensity to increase costs on consumer goods. Plus, they lack the flexibility of income taxes, which can be set at any desired rate, and they wouldn’t allow for incentives such as charitable donations or child tax credits.

    “Inequality is very highly skewed toward the top,” said Michael Graetz, a professor of tax law at Yale University. “We’ve got more billionaires than we’ve ever had. We’ve got more millionaires than we’ve ever had. So it’s a strange time to be reducing the tax burden on the top and increasing it on the middle. It’s a proposal that is very effective for fundraising for Republicans and it always has been.”

    The White House did not immediately respond to a request for comment.

    ___

    Find AP Fact Checks here: https://apnews.com/APFactCheck.

    [ad_2]

    Source link

  • U.S. trade deficit drops 24% in August as Trump’s tariffs reduce imports

    [ad_1]

    WASHINGTON (AP) — The U.S. trade deficit fell by nearly 24% in August as President Donald Trump’s sweeping global tariffs pushed imports lower.

    In a report delayed for more than seven weeks by the federal government shutdown, the Commerce Department said Wednesday that the the gap between what the United States buys from other countries and what it sells them fell to $59.6 billion in August, from $78.2 billion in July.

    Imports of goods and services dropped 5% to $340.4 billion in August from July when U.S. companies were stocking up on foreign products before Trump finalized taxes on products from almost every country on earth. Those levies went into effect Aug. 7.

    U.S. exports blipped up 0.1% in August to $280.8 billion.

    Customers shop at the Reading Terminal Market in Philadelphia, Wednesday, Oct. 29, 2025. (AP Photo/Matt Rourke)

    Trump, charging that America’s persistent trade deficits mean that other countries have taken advantage of the U.S., has overturned decades of U.S. policy in favor of free trade, slapping double-digit tariffs on imports from most countries and targeting specific products, including steel, copper and autos, with their own levies.

    Still, the U.S. trade deficit is up so far in 2025, coming in at $713.6 billion through August, up 25% from $571.1 billion in January-August 2024.

    A drop in imports and the trade deficit is good for economic growth because foreign products are subtracted from the nation’s gross domestic product. GDP is the output of a nation’s goods and services.

    “August’s smaller trade deficit will be a tailwind for third quarter real GDP, since it means that more U.S. expenditures were directed toward domestically-produced goods and services rather than foreign ones,” Bill Adams, chief economist at Comerica Bank, wrote in a commentary. “While this release is quite dated because of the government shutdown, it contributes to evidence that the economy was growing briskly in the third quarter.’’

    A worker arranges produce at the Reading Terminal Market in Philadelphia, Wednesday, Oct. 29, 2025. (AP Photo/Matt Rourke)

    A worker arranges produce at the Reading Terminal Market in Philadelphia, Wednesday, Oct. 29, 2025. (AP Photo/Matt Rourke)

    Tariffs, which Trump says will protect U.S. industries and lure factories to America, are paid by importers who typically attempt to pass along the higher cost to their customers. Economists say Trump’s tariffs are one reason U.S. inflation remains stubbornly above the Federal Reserve’s 2% target.

    After voters’ dissatisfaction with the high cost of living led to big Democratic gains in the Nov. 4 elections, the president relented and dropped tariffs last week on beef, coffee, tea, fruit juice, cocoa, spices, bananas, oranges, tomatoes and certain fertilizers, saying they “may, in some cases” have contributed to higher prices.

    His tariffs are also facing a legal challenge that has gone to the Supreme Court. In a Nov. 5, hearing, the justices sounded skeptical that the president had the authority to bypass Congress and slap unlimited tariffs on most imports simply by declaring a national emergency.

    ____

    AP Writer Josh Boak contributed to this report.

    [ad_2]

    Source link

  • Japan’s economy contracts as exports get hit by US tariffs

    [ad_1]

    TOKYO (AP) — Japan’s economy sank at an annualized rate of 1.8% in the July-September period, government data showed Monday, as President Donald Trump’s tariffs sent the nation’s exports spiraling.

    On a quarter-by-quarter basis, Japan’s gross domestic product, or GDP, or the sum value of a nation’s goods and services, slipped 0.4%, in the first contraction in six quarters, the Cabinet Office said.

    The annualized rate shows what the economy would have done if the same rate were to continue for a year. The fall was still smaller than the 0.6% drop the market had expected.

    A big decline during the quarter came in exports, which were 1.2% down from the previous quarter.

    Some businesses had sped up exports, when they could, to beat the tariffs kicking in, inflating some of the earlier data for exports.

    On an annualized basis, exports dropped 4.5% in the three months through September.

    Imports for the third quarter slipped 0.1%. Private consumption edged up 0.1% during the quarter.

    Tariffs are a major blow to Japan’s export-reliant economy, led by powerful automakers like Toyota Motor Corp., although such manufacturers have over the years moved production abroad to avert the blunt of tariffs.

    The U.S. now slaps a 15% tariff on nearly all Japanese imports. Earlier the tariffs were 25%.

    Japan also faced political uncertainty recently, until Sanae Takaichi became prime minister in October.

    ___

    Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

    [ad_2]

    Source link

  • Trump is ramping up a new effort to convince a skeptical public he can fix affordability worries

    [ad_1]

    WASHINGTON (AP) — President Donald Trump is adjusting his messaging strategy to win over voters who are worried about the cost of living with plans to emphasize new tax breaks and show progress on fighting inflation.

    The messaging is centered around affordability, and the push comes after inflation emerged as a major vulnerability for Trump and Republicans in Tuesday’s elections, in which voters overwhelmingly said the economy was their biggest concern.

    Democrats took advantage of concerns about affordability to run up huge margins in the New Jersey and Virginia governor races, flipping what had been a strength for Trump in the 2024 presidential election into a vulnerability going into next year’s midterm elections.

    White House officials and others familiar with their thinking requested anonymity to speak for this article in order to not get ahead of the president’s actions. They stressed that affordability has always been a priority for Trump, but the president plans to talk about it more, as he did Thursday when he announced that Eli Lilly and Novo Nordisk would reduce the price of their anti-obesity drugs.

    “We are the ones that have done a great job on affordability, not the Democrats,” Trump said at an event in the Oval Office to announce the deal. “We just lost an election, they said, based on affordability. It’s a con job by the Democrats.”

    The White House is keeping up a steady drumbeat of posts on social media about prices and deals for Thanksgiving dinner staples at retailers such as Walmart, Lidl, Aldi and Target.

    “I don’t want to hear about the affordability, because right now, we’re much less,” Trump told reporters Thursday, arguing that things are much better for Americans with his party in charge.

    “The only problem is the Republicans don’t talk about it,” he said.

    The outlook for inflation is unclear

    As of now, the inflation outlook has worsened under Trump. Consumer prices in September increased at an annual rate of 3%, up from 2.3% in April, when the president first began to roll out substantial tariff hikes that suddenly burdened the economy with uncertainty. The AP Voter Poll showed the economy was the leading issue in Tuesday’s elections in New Jersey, Virginia, New York City and California.

    Grocery prices continue to climb, and recently, electricity bills have emerged as a new worry. At the same time, the pace of job gains has slowed, plunging 23% from the pace a year ago.

    The White House maintains a list of talking points about the economy, noting that the stock market has hit record highs multiple times and that the president is attracting foreign investment. Trump has emphasized that gasoline prices are coming down, and maintained that gasoline is averaging $2 a gallon, but AAA reported Thursday that the national average was $3.08, about two cents lower than a year ago.

    “Americans are paying less for essentials like gas and eggs, and today the Administration inked yet another drug pricing deal to deliver unprecedented health care savings for everyday Americans,” said White House spokesman Kush Desai.

    Trump gets briefed about the economy by Treasury Secretary Scott Bessent and other officials at least once a week and there are often daily discussions on tariffs, a senior White House official said, noting Trump is expected to do more domestic travel next year to make his case that he’s fixing affordability.

    But critics say it will be hard for Trump to turn around public perceptions on affordability.

    “He’s in real trouble and I think it’s bigger than just cost of living,” said Lindsay Owens, executive director of Groundwork Collaborative, a liberal economic advocacy group.

    Owens noted that Trump has “lost his strength” as voters are increasingly doubtful about Trump’s economic leadership compared to Democrats, adding that the president doesn’t have the time to turn around public perceptions of him as he continues to pursue broad tariffs.

    New hype about income tax cuts ahead of April

    There will be new policies rolled out on affordability, a person familiar with the White House thinking said, declining to comment on what those would be. Trump on Thursday indicated there will be more deals coming on drug prices. Two other White House officials said messaging would change — but not policy.

    A big part of the administration’s response on affordability will be educating people ahead of tax season about the role of Trump’s income tax cuts in any refunds they receive in April, the person familiar with planning said. Those cuts were part of the sprawling bill Republicans muscled through Congress in July.

    This individual stressed that the key challenge is bringing prices down while simultaneously having wages increase, so that people can feel and see any progress.

    There’s also a bet that the economy will be in a healthier place in six months. With Federal Reserve Chair Jerome Powell’s term ending in May, the White House anticipates the start of consistent cuts to the Fed’s benchmark interest rate. They expect inflation rates to cool and declines in the federal budget deficit to boost sentiment in the financial markets.

    But the U.S. economy seldom cooperates with a president’s intentions, a lesson learned most recently by Trump’s predecessor, Democrat Joe Biden, who saw his popularity slump after inflation spiked to a four-decade high in June 2022.

    The Trump administration maintains it’s simply working through an inflation challenge inherited from Biden, but new economic research indicates Trump has created his own inflation challenge through tariffs.

    Since April, Harvard University economist Alberto Cavallo and his colleagues, Northwestern University’s Paola Llamas and Universidad de San Andres’ Franco Vazquez, have been tracking the impact of the import taxes on consumer prices.

    In an October paper, the economists found that the inflation rate would have been drastically lower at 2.2%, had it not been for Trump’s tariffs.

    The administration maintains that tariffs have not contributed to inflation. They plan to make the case that the import taxes are helping the economy and dismiss criticisms of the import taxes as contributing to inflation as Democratic talking points.

    The fate of Trump’s country-by-country tariffs is currently being decided by the Supreme Court, where justices at a Wednesday hearing seemed dubious over the administration’s claims that tariffs were essentially regulations and could be levied by a president without congressional approval. Trump has maintained at times that foreign countries pay the tariffs and not U.S. citizens, a claim he backed away from slightly Thursday.

    “They might be paying something,” he said. “But when you take the overall impact, the Americans are gaining tremendously.”

    _____

    Associated Press writers Will Weissert and Michelle L. Price contributed to this report.

    [ad_2]

    Source link

  • What to know about Trump’s plan to give Americans a $2,000 tariff dividend

    [ad_1]

    WASHINGTON (AP) — President Donald Trump boasts that his tariffs protect American industries, lure factories to the United States, raise money for the federal government and give him diplomatic leverage.

    Now, he’s claiming they can finance a windfall for American families, too: He’s promising a generous tariff dividend.

    The president proposed the idea on his Truth Social media platform Sunday, five days after his Republican Party lost elections in Virginia, New Jersey and elsewhere largely because of voter discontent with his economic stewardship — specifically, the high cost of living.

    The tariffs are bringing in so much money, the president posted, that “a dividend of at least $2000 a person (not including high income people!) will be paid to everyone.’’

    Budget experts scoffed at the idea, which conjured memories of the Trump administration’s short-lived plan for DOGE dividend checks financed by billionaire Elon Musk’s federal budget cuts.

    “The numbers just don’t check out,″ said Erica York, vice president of federal tax policy at the nonpartisan Tax Foundation.

    Details are scarce, including what the income limits would be and whether payments would go to children.

    Even Trump’s treasury secretary, Scott Bessent, sounded a bit blindsided by the audacious dividend plan. Appearing Sunday on ABC’s “This Week,’’ Bessent said he hadn’t discussed the dividend with the president and suggested that it might not mean that Americans would get a check from the government. Instead, Bessent said, the rebate might take the form of tax cuts.

    The tariffs are certainly raising money — $195 billion in the budget year that ended Sept. 30, up 153% from $77 billion in fiscal 2024. But they still account for less than 4% of federal revenue and have done little to dent the federal budget deficit — a staggering $1.8 trillion in fiscal 2025.

    Budget wonks say Trump’s dividend math doesn’t work.

    President Donald Trump speaks during an event to mark Veterans Day at Arlington National Cemetery, Tuesday, Nov. 11, 2025, in Arlington, Va. (AP Photo/Evan Vucci)

    John Ricco, an analyst with the Budget Lab at Yale University, reckons that Trump’s tariffs will bring in $200 billion to $300 billion a year in revenue. But a $2,000 dividend — if it went to all Americans, including children — would cost $600 billion. “It’s clear that the revenue coming in would not be adequate,’’ he said.

    Ricco also noted that Trump couldn’t just pay the dividends on his own. They would require legislation from Congress.

    Moreover, the centerpiece of Trump’s protectionist trade policies — double-digit taxes on imports from almost every country in the world — may not survive a legal challenge that has reached the U.S. Supreme Court.

    In a hearing last week, the justices sounded skeptical about the Trump administration’s assertion of sweeping power to declare national emergencies to justify the tariffs. Trump has bypassed Congress, which has authority under the Constitution to levy taxes, including tariffs.

    If the court strikes down the tariffs, the Trump administration may be refunding money to the importers who paid them, not sending dividend checks to American families. (Trump could find other ways to impose tariffs, even if he loses at the Supreme Court; but it could be cumbersome and time-consuming.)

    Mainstream economists and budget analysts note that tariffs are paid by U.S. importers who then generally try to pass along the cost to their customers through higher prices.

    The dividend plan “misses the mark,’’ the Tax Foundation’s York said. ”If the goal is relief for Americans, just get rid of the tariffs.’’

    [ad_2]

    Source link

  • Trump has other tariff options if the Supreme Court strikes down his worldwide import taxes

    [ad_1]

    WASHINGTON (AP) — President Donald Trump has warned that the United States will be rendered “defenseless’’ and possibly “reduced to almost Third World status” if the Supreme Court strikes down the tariffs he imposed this year on nearly every country on earth.

    The justices sounded skeptical during oral arguments Wednesday of his sweeping claims of authority to impose tariffs as he sees fit.

    The truth, though, is that Trump will still have plenty of options to keep taxing imports aggressively even if the court rules against him. He can re-use tariff powers he deployed in his first term and can reach for others, including one that dates back to the Great Depression.

    “It’s hard to see any pathway here where tariffs end,” said Georgetown trade law professor Kathleen Claussen. “I am pretty convinced he could rebuild the tariff landscape he has now using other authorities.”

    At Wednesday’s hearing, in fact, lawyer Neal Katyal, representing small businesses suing to get the tariffs struck down, argued that Trump didn’t need the boundless authority he’s claimed to impose tariffs under 1977 International Emergency Economic Powers Act (IEEPA). That is because Congress delegated tariff power to the White House in several other statutes — though it carefully limited the ways the president could use the authority.

    “Congress knows exactly how to delegate its tariff powers,” Katyal said.

    Tariffs have become a cornerstone of Trump’s foreign policy in his second term, with double-digit “reciprocal” tariffs imposed on most countries, which he has justified by declaring America’s longstanding trade deficits a national emergency.

    The average U.S. tariff has gone from 2.5% when Trump returned to the White House in January to 17.9%, the highest since 1934, according to calculations by Yale University’s Budget Lab.

    The president acted alone even though the U.S. Constitution specifically gives the power to tax – and impose tariffs – to Congress.

    Still, Trump “will have other tools that can cause pain,’’ said Stratos Pahis of Brooklyn Law School. Here’s a look at some of his options:

    Countering unfair trade practices

    The United States has long had a handy cudgel to wallop countries it accuses of engaging in “unjustifiable,” “unreasonable” or “discriminatory” trade practices. That is Section 301 of the Trade Act of 1974.

    And Trump has made aggressive use of it himself — especially against China. In his first term, he cited Section 301 to impose sweeping tariffs on Chinese imports in a dispute over the sharp-elbowed tactics that Beijing was using to challenge America’s technological dominance. The U.S. is also using 301 powers to counter what it calls unfair Chinese practices in the shipbuilding industry.

    “You’ve had Section 301 tariffs in place against China for years,” said Ryan Majerus, a partner at King & Spalding and a trade official in Trump’s first administration and in Biden’s.

    There are no limits on the size of Section 301 tariffs. They expire after four years but can be extended.

    But the administration’s trade representative must conduct an investigation and typically hold a public hearing before imposing 301 tariffs.

    John Veroneau, general counsel for the U.S. trade representative in the George W. Bush administration, said Section 301 is useful in taking on China. But it has drawbacks when it comes to dealing with the smaller countries that Trump has hammered with reciprocal tariffs.

    “Undertaking dozens and dozens of 301 investigations of all of those countries is a laborious process,” Veroneau said.

    Targeting trade deficits

    In striking down Trump’s reciprocal tariffs in May, the U.S. Court of International Trade ruled that the president couldn’t use emergency powers to combat trade deficits.

    That is partly because Congress had specifically given the White House limited authority to address the problem in another statute: Section 122, also of the Trade Act of 1974. That allows the president to impose tariffs of up to 15% for up to 150 days in response to unbalanced trade. The administration doesn’t even have to conduct an investigation beforehand.

    But Section 122 authority has never been used to apply tariffs, and there is some uncertainty about how it would work.

    Protecting national security

    In both of his terms, Trump has made aggressive use of his power — under Section 232 of Trade Expansion Act of 1962 — to impose tariffs on imports that he deems a threat to national security.

    In 2018, he slapped tariffs on foreign steel and aluminum, levies he’s expanded since returning to the White House. He also plastered Section 232 tariffs on autos, auto parts, copper, lumber.

    In September, the president even levied Section 232 tariffs on kitchen cabinets, bathroom vanities and upholstered furniture. “Even though people might roll their eyes” at the notion that imported furniture poses a threat to national security, Veroneau said, “it’s difficult to get courts to second-guess a determination by a president on a national security matter.”

    Section 232 tariffs are not limited by law but do require an investigation by the U.S. Commerce Department. It’s the administration itself that does the investigating – also true for Section 301 cases — “so they have a lot of control over the outcome,” Veroneau said.

    Reviving Depression-era tariffs

    Nearly a century ago, with the U.S. and world economies in collapse, Congress passed the Tariff Act of 1930, imposing hefty taxes on imports. Known as the Smoot-Hawley tariffs (for their congressional sponsors), these levies have been widely condemned by economists and historians for limiting world commerce and making the Great Depression worse. They also got a memorable pop culture shoutout in the 1986 movie “Ferris Bueller’s Day Off.”

    Section 338 of the law authorizes the president to impose tariffs of up to 50% on imports from countries that have discriminated against U.S. businesses. No investigation is required, and there’s no limit on how long the tariffs can stay in place.

    Those tariffs have never been imposed — U.S. trade negotiators traditionally have favored Section 301 sanctions instead — though the United States used the threat of them as a bargaining chip in trade talks in the 1930s.

    In September, Treasury Secretary Scott Bessent told Reuters that the administration was considering Section 338 as a Plan B if the Supreme Court ruled against Trump’s use of emergency powers tariffs.

    The Smoot-Hawley legislation has a bad reputation, Veroneau said, but Trump might find it appealing. “To be the first president to ever use it could have some cache.”

    ____

    Associated Press Staff Writer Lindsay Whitehurst contributed to this story.

    [ad_2]

    Source link

  • European Union welcomes suspension of China’s rare earth controls

    [ad_1]

    BRUSSELS (AP) — The European Union has agreed with China on stabilizing the flow of rare earth materials and products from China that are critical elements for many high-tech and military products, an official said Tuesday. EU trade commissioner Maroš Šefčovič met with Chinese Commerce Minister Wang Wentao in Brussels on Friday to discuss Beijing’s export controls on rare earths issued in April and October, and European regulations on semiconductor sales, said Olof Gill, a spokesperson for the European Commission, the 27-nation bloc’s executive arm. Like the U.S., Europe runs a huge trade deficit with China — around 300 billion euros ($345 billion) last year. It relies heavily on China for rare earth material and products, which are also used to make magnets used in cars and appliances.

    Gill said that the EU welcomed China’s recent 12-month suspension of rare earths export controls, and called for a new and stable system of trade in the critical materials. The EU is working with China on an export licensing system to ensure a more stable flow of rare earth minerals to the bloc, he said.

    “This is an appropriate and responsible step in the context of ensuring stable global trade flows in a critically important area,” Gill said.

    Šefčovič said that that Brussels and Beijing were continuing to speak about further trade measures.

    Stay up to date with the news and the best of AP by following our WhatsApp channel.


    Follow on

    “Both sides reaffirmed commitment to continue engagement on improving the implementation of export control policies,” he said in an X post.

    China is the EU’s second-largest trading partner in goods, after the United States. Bilateral trade is estimated at 2.3 billion euros ($2.7 billion) per day.

    Both China and the EU believe it’s in their interest to keep their trade ties stable for the sake of the global economy, and they share certain climate goals.

    [ad_2]

    Source link

  • Deal between the US and China is undoing damage from a self-inflicted trade war

    [ad_1]

    BUSAN, South Korea (AP) — Three-digit tariffs are off the table, but import duties on each other are higher than in January.

    Rare earth materials will flow more smoothly, but China has put in place an export permitting regime that it can tighten or loosen as needed.

    Port fees will go away, but only for one year.

    And Beijing is again buying U.S. soybeans after it had abruptly cut off American farmers.

    After months of posturing, arguing and threatening, U.S. President Donald Trump and Chinese leader Xi Jinping have essentially turned back the clock. While the meeting between the two leaders was hailed by Trump as a “roaring success,” the agreement that came out of it may only serve to undo some of the damages Trump inflicted with his trade war upon his return to the White House.

    “It is hard to see what major gains the U.S. has made in the bilateral relationship relative to where things stood before Trump took office,” said Eswar Prasad, an economist at Cornell University.

    On the Senate floor, Minority Leader Chuck Schumer on Thursday denounced the deal out of South Korea as leaving the U.S. as “no better off.”

    “If anything, things are worse: Prices have gone up and China has agreed to nothing of substance that will improve trade between our nations,” the Democrat senator said, adding that Trump “started a trade war, created a giant mess for businesses, consumers, and soybean farmers, and then he celebrates for trying to clean up the very mess he created in the first place.”

    Stay up to date with the news and the best of AP by following our WhatsApp channel.


    Follow on

    Nevertheless, the deal has injected a degree of stability, giving the world’s two largest economies — as well as the rest of the world — time and room to readjust.

    Washington and Beijing still need to finalize their agreements, a process that always has the potential for fresh disputes. But for now, Xi appears interested in moving past the latest tensions.

    In an official statement, Xi referred to “recent twists and turns” that “offered some lessons for both sides.” He said they should be “focusing on the benefits of cooperation rather than falling into a vicious cycle of mutual retaliation.”

    Both sides reduce tariffs, resume soybean sales to China

    Trump fired the first shot in the trade war in February when he imposed an additional 10% tariff on Chinese goods over the allegation that Beijing failed to stem the flow of chemicals used to make fentanyl. That soared to as much as 145% after China retaliated, but Trump walked it back following market meltdowns.

    The two sides in May slashed their massive tariffs to 10% on each other, while Washington retained the 20% fentanyl-related tariff, and China its retaliatory tariffs of 10% or 15% on U.S. farm goods.

    Now, Trump said he has removed one 10% fentanyl tariff in exchange for Beijing’s cooperation in fighting the illicit drug.

    U.S. Secretary of Agriculture Brooke Rollins said China would also withdraw the retaliatory tariffs on U.S. agricultural products. A spokesperson for the Chinese Ministry of Commerce said Beijing would “adjust accordingly” its countermeasures without giving details.

    In addition, China has agreed to buy 12 million metric tons of U.S. beans through January, and will buy at least 25 million metric tons annually for next three years, Rollins said on Thursday.

    That compares to China buying 17 million metric tons of U.S. soybeans in the first eight months of this year but importing zero in September. In 2024, China bought 22 million metric tons of U.S. soybeans, according to state media.

    Although China did not confirm the details of the latest soybean deal, the spokesperson for the Chinese commerce ministry said the two sides have reached “consensus” to expand agricultural trade.

    One-year truce on export controls and port fees

    In April, China used its monopoly power in the processing of critical minerals to institute a permitting requirement for the export of several rare earth elements. On October 9, Beijing expanded the export rules, apparently in response to the U.S. decision to extend export controls to businesses affiliated with already-blacklisted foreign companies.

    Furious, Trump threatened to impose a new 100% tariff on China, but the two sides managed to cool down in time for Trump to meet Xi in South Korea.

    Beijing on Thursday said it would pause for a year the rare earth export rules from October to “conduct research to refine specific plans,” while the U.S. will suspend its affiliate rule for one year.

    The delay by Beijing “provides just enough time for the United States to accelerate investment in capabilities and innovation for rare earths and permanent magnets,” said Wade Senti, president of the U.S. permanent magnet company AML. “This needs to be on warp speed and at a scale never seen before since the COVID-19 response,” he said.

    Another fresh thorn was the U.S. introduction of port fees in October targeting China-linked vessels, as part of a plan to restore America’s shipbuilding capabilitie s. Beijing answered with countermeasures against the U.S.

    The port fees on each other are not removed but will be suspended for one year, the Chinese commerce ministry said.

    The future is still uncertain

    Whether Trump accepts a return to the status quo or pushes to address fundamental issues that have persisted for years between the U.S. and China remains unclear. Nothing about Thursday’s meeting — the first between Trump and Xi in six years — affects Chinese manufacturing dominance that Trump has blamed for the loss of American blue collar jobs.

    Sean Stein, president of the U.S.-China Business Council, called the latest developments “very encouraging” and added: “We hope that future negotiations will address long-standing market access barriers, help level the playing field for U.S. companies, and bring long-term predictability to the bilateral trade relationship.”

    There are more opportunities on the horizon to keep working on these challenges. Trump said he will go to China in April and Xi will visit the U.S. after that.

    If Trump isn’t successful, this period could be remembered for a lot of sound and fury but no change in the basic trajectory of China’s ascendant economy.

    “Generally, Trump grows impatient with anything beyond the immediate, and it is the Chinese that play for longer term advantage,” said Kurt Campbell, a former deputy secretary of state in the Biden administration and now chairman of The Asia Group.

    ___

    Tang and Wiseman reported from Washington. AP writer Josh Funk in Omaha, Neb., contributed to the report

    [ad_2]

    Source link

  • China’s economy slows to 4.8% annual growth in July-September, hit by tariffs and slack demand

    [ad_1]

    HONG KONG (AP) — China’s economy expanded at the slowest annual pace in a year in July-September, growing 4.8%, weighed down by trade tensions with the United States and slack domestic demand.

    The July-September data was the weakest pace of growth since the third quarter of 2024, and compares with a 5.2% pace of growth in the previous quarter, the government said in a report Monday.

    In January-September, the world’s second largest economy grew at a 5.2% annual pace. Despite U.S. President Donald Trump’s higher tariffs on imports from China, its exports have remained relatively strong as companies expanded sales to other world markets.

    China’s exports to the United States fell 27% in September from the year before, even though growth in its global exports hit a six-month high, climbing 8.3%.

    Exports of electric vehicles doubled in September from a year earlier, while domestic passenger car sales climbed 11.2% year-on-year in last month, down from a 15% rise in August, according to data released last week.

    Tensions between Beijing and Washington remain elevated, and it’s unclear if Trump and Chinese leader Xi Jinping will go ahead with a proposed meeting during a regional summit at the end of this month.

    Xi and other ruling Communist Party members are convening one of China’s most important political meetings for the year on Monday, where they will map out economic and social policy goals for the country for the next five years.

    Stay up to date with the news and the best of AP by following our WhatsApp channel.


    Follow on

    The economy slowed in the last quarter as the authorities moved to curb fierce price wars in sectors such as the auto industry due to excess capacity.

    China is also facing challenges including a prolonged property sector downturn which has been affecting consumption and demand.

    Data released Monday showed China’s residential property sales fell 7.6% by value in the January-September period from a year earlier. Industrial output rose 6.5% year-on-year last month, the fastest pace since June, but retail sales growth slowed to 3% from the year before.

    Ratings agency S&P estimates nationwide new home sales will fall by 8% in 2025 from the year before and by 6% to 7% in 2026.

    The World Bank expects China’s economy to grow at a 4.8% annual rate this year. The government’s official growth target is around 5%.

    Chinese shares rose Monday, with the Hang Seng in Hong Kong climbing 2.3% and the Shanghai Composite index up 0.5%.

    A National Bureau of Statistics spokesman said China has a “solid foundation” to achieve its full-year growth target, but cited external complications — including trade friction with the U.S. and other trading partners and protectionist policies in many countries — as reasons for the slowdown.

    China’s stronger economic growth in the first half of this year gives it “some buffer” to achieve the growth target, said Lynn Song, chief economist for Greater China at ING Bank.

    However, spending during China’s eight-day Golden Week national holiday in October was “mildly disappointing,” reflecting sluggish consumer confidence and demand, Morningstar analysts said in a note this month.

    Investments in factories, equipment and other “fixed assets” fell 0.5% in the last quarter, underscoring weakness in domestic demand. It also was reflected in prices, which have continued to fall both at the consumer and the wholesale level.

    There’s room for the government to do more, Song said.

    “(We) are looking to see if there will be further measures to support consumption and the property market, as the impact from previous policies begins to weaken,” Song said.

    Economists are also expecting a rate cut by China’s central bank by the end of the year, which could encourage more spending and investment.

    China’s economy is also likely to further slow in 2026, said Jacqueline Rong, chief China economist at BNP Paribas, as property investment in the country “looks (to) continue falling” and the AI boom, which helped lift China’s economy and fueled a stock market rally, is expected to moderate.

    [ad_2]

    Source link

  • Apple delivers strong quarter despite trade war challenges and ongoing artificial technology issues

    [ad_1]

    SAN FRANCISCO (AP) — Apple delivered financial results during its summertime quarter that exceeded analyst projections, despite being caught in the crosshairs of a global trade war at the same time the trendsetting company is scrambling to catch up to its Big Tech peers in the artificial intelligence race.

    The performance announced Thursday was driven largely by strong initial demand for its iPhone 17 lineup that went on sale last month.

    Although the iPhone 17 lacks the AI wizardry featured in rival devices recently introduced by Samsung and Google, Apple spruced up its latest models with a redesign highlighted by a sleek “liquid glass” appearance on the display screens.

    Apple also largely maintained its pricing on its latest iPhones, despite being squeezed by the tariffs that President Donald Trump has imposed on the U.S. devices that the company mostly makes in India and China. The tariffs cost Apple $1.1 billion during the past quarter and are expected to cost another $1.4 billion during the final three months of the year.

    The formula apparently was enough to win over consumers, particularly in the United States and Europe, helping to produce iPhone sales totaling $49 billion during the July-September period, a 6% increase from the same time last year. That was slightly below the 8% jump in iPhone sales that had been anticipated by analysts, and less than the 13% bump in sales during the April-June period.

    IDC estimates that 58.6 million iPhones were sold worldwide in the July-September quarter, putting Apple second behind Samsung at 61.4 million of their Android-powered phones sold worldwide in the quarter.

    Buoyed by the iPhone results, Apple earned $27.5 billion, or $1.85 per share, nearly doubling its profit from a year ago. Revenue climbed 8% from a year ago to $102.5 billion. Both the earnings and revenue eclipsed the analyst forecasts that steer the stock market.

    Apple shares surged 3% in extended trading after the numbers came out.

    In a conference call with analysts, Apple CEO Tim Cook indicated his belief that the iPhone 17 lineup will continue to do well, predicting even more of the devices will be sold during the final three months of the year. “As we head into the holiday season with our most powerful lineup ever, I couldn’t be more excited for what’s to come,” Cook said. He cited the iPhone 17’s popularity in most parts of the world except China, where sales of the device dipped by 4% from a year ago.

    The Cupertino, California, company expects its iPhone sales to increase at least 10% from last year’s holiday season, according to projections provided by Apple’s chief financial officer, Kevan Parekh. Total revenue is expected to rise at a similar rate.

    Apple’s stock has been on a tear since a report earlier this month from the research firm International Data Corp. telegraphed the quarterly results with a preliminary analysis that concluded the company had set a new July-September record for iPhone sales. The rally catapulted Apple’s market value above $4 trillion for the first time earlier this week and now the stage is set for the shares to hit another new high during Friday’s regular trading session.

    But Apple has been widely seen as a laggard in the AI craze, one of the reasons that Nvidia — a chipmaker whose processors power the technology — became the first company to be valued at $5 trillion earlier this week.

    Apple had promised a wide array of AI features would be rolling out on last year’s iPhone models, but was only able to deliver a few of them. The missing upgrades included a smarter and more versatile version of its frequently flummoxed Siri virtual assistant – a makeover that Apple now doesn’t expect to complete until next year.

    But Apple has a long history of late starts when technology starts to head in another direction before it finally catches up and emerges as a front-runner.

    If Apple can pull it off again by eventually implanting more AI features on the iPhone, Wedbush Securities analyst Dan Ives believes those breakthroughs could boost the company’s market share by another $1 trillion to $1.5 trillion, translating into $75 to $100 per share.

    [ad_2]

    Source link

  • Trump says a Canadian ad misstated Ronald Reagan’s views on tariffs. Here are the facts and context

    [ad_1]

    WASHINGTON (AP) — President Donald Trump pulled out of trade talks with Canada Thursday night, furious over what he called a “fake’’ television ad from Ontario’s provincial government that quoted former U.S. President Ronald Reagan from 38 years ago criticizing tariffs — Trump’s favorite economic tool.

    The ad features audio excerpts from an April 25, 1987 radio address in which Reagan said: “Over the long run such trade barriers hurt every American worker and consumer.’’

    Trump attacked the ad on Truth Social Friday posting: “CANADA CHEATED AND GOT CAUGHT!!! They fraudulently took a big buy ad saying that Ronald Reagan did not like Tariffs, when actually he LOVED TARIFFS FOR OUR COUNTRY, AND ITS NATIONAL SECURITY.″

    The Ronald Reagan Presidential Foundation and Institute criticized the ad on X Thursday night posting that it “misrepresents the ‘Presidential Radio Address to the Nation on Free and Fair Trade’ dated April 25, 1987.”

    While Trump called the ad fake, Reagan’s words were real. But context is missing.

    Here’s a look at the facts:

    Reagan, who held office during a period of growing fear over Japan’s rising economic might, made the address a week after he himself had imposed tariffs on Japanese semiconductors; he was attempting to explain the decision, which seemed at odds with his reputation as a free trader.

    Reagan did not, in fact, love tariffs. He often criticized government policies – including protectionist measures such as tariffs – that interfered with free commerce and he spent much of 1987 radio address spelling out the case against tariffs.

    “High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars,’’ he said. “The result is more and more tariffs, higher and higher trade barriers, and less and less competition. So, soon, because of the prices made artificially high by tariffs that subsidize inefficiency and poor management, people stop buying. Then the worst happens: Markets shrink and collapse; businesses and industries shut down; and millions of people lose their jobs.’’

    But Reagan’s policies were more complicated than his rhetoric.

    In addition to taxing Japanese semiconductors, Reagan slapped levies on heavy motorcycles from Japan to protect Harley-Davidson. He also strong-armed Japanese automakers into accepting “voluntary’’ limitations on their exports to the United States, ultimately encouraging them to set up factories in the American Midwest and South.

    And he pressured other countries to push down the value of the currencies to help make American exports more competitive in world markets.

    Robert Lighthizer, a Reagan trade official who served as Trump’s top trade negotiator from 2017 through 2021, wrote in his 2023 memoir that “President Reagan distinguished between free trade in theory and free trade in practice.’’

    In 1988, an analyst at the libertarian Cato Institute even declared Reagan “ the most protectionist president since Herbert Hoover, the heavyweight champion of protectionists.’’

    Reagan, though, was no trade warrior. Discussing his semiconductor tariffs in the April 1987 radio address, he said that he was forced to impose them because the Japanese were not living up to a trade agreement and that “such tariffs or trade barriers and restrictions of any kind are steps that I am loath to take.’’

    Trump, on the other hand, has no such reticence. He argues that tariffs can protect American industry, draw manufacturing back to the United States and raise money for the Treasury. Since returning to the White House in January, he has slapped double-digit tariffs on almost every country on earth and targeted specific products including autos, steel and pharmaceuticals.

    The average effective U.S. tariff rate has risen from around 2.5% at the start of the 2025 to 18%, highest since 1934, according to the Budget Lab at Yale University.

    Trump’s enthusiastic use of import taxes — he has proudly called himself “Tariff Man’’ — has drawn a challenge from businesses and states charging that he overstepped his authority. The Constitution gives Congress the power to levy taxes, including tariffs, though lawmakers have gradually ceded considerable authority over trade policy to the White House. The Supreme Court is set to hear arguments in the case early next month.

    Trump claimed Thursday that the Canadian ad was intended “to interfere with the decision of the U.S. Supreme Court, and other courts.’’

    [ad_2]

    Source link

  • Trump’s new tariffs go into effect as US economy shows signs of strain

    [ad_1]

    WASHINGTON (AP) — President Donald Trump began imposing higher import taxes on dozens of countries Thursday just as the economic fallout of his monthslong tariff threats has begun to cause visible damage to the U.S. economy.

    Just after midnight, goods from more than 60 countries and the European Union became subject to tariff rates of 10% or higher. Products from the EU, Japan and South Korea are taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh are taxed at 20%. Trump also expects the EU, Japan and South Korea to invest hundreds of billions of dollars in the United States.

    “I think the growth is going to be unprecedented,” Trump said Wednesday. He said the U.S. was “taking in hundreds of billions of dollars in tariffs,” but did not provide a specific figure for revenues because “we don’t even know what the final number is” regarding the rates.

    Despite the uncertainty, the White House is confident that the onset of his tariffs will provide clarity about the path for the world’s largest economy. Now that companies understand the direction the U.S. is headed, the Republican administration believes it can ramp up new investments and jump-start hiring in ways that can rebalance America as a manufacturing power.

    So far, however, there are signs of self-inflicted wounds to the U.S. as companies and consumers brace for the impact of the new taxes.

    Risk of economic erosion

    Hiring began to stall, inflationary pressures crept upward and home values in key markets started to decline after the initial tariff rollout in April, said John Silvia, CEO of Dynamic Economic Strategy.

    “A less productive economy requires fewer workers,” Silvia said. “But there is more, the higher tariff prices lower workers’ real wages. The economy has become less productive, and firms cannot pay the same real wages as before. Actions have consequences.”

    Many economists say the risk is that the American economy is steadily eroded.

    “It’s going to be fine sand in the gears and slow things down,” said Brad Jensen, a professor at Georgetown University.

    Trump has promoted the tariffs as a way to reduce America’s persistent trade deficit. But importers tried to avoid the taxes by bringing in more goods before the tariffs took effect. As a result, the $582.7 billion trade imbalance for the first half of the year was 38% higher than in 2024. Total construction spending has dropped 2.9% over the past year.

    The economic pain is not confined to the U.S.

    Germany, which sends 10% of its exports to the U.S. market, saw industrial production sag 1.9% in June as Trump’s earlier rounds of tariffs took hold. “The new tariffs will clearly weigh on economic growth,” said Carsten Brzeski, global chief of macro for ING bank.

    Dismay in India and Switzerland

    The lead-up to Thursday fit the slapdash nature of Trump’s tariffs, which have been rolled out, walked back, delayed, increased, imposed by letter and renegotiated.

    Trump on Wednesday announced additional 25% tariffs to be imposed on India because of its purchases of Russian oil, bringing its total import taxes to 50%.

    A leading group of Indian exporters said that will affect nearly 55% of the country’s outbound shipments to America and force exporters to lose long-standing clients.

    “Absorbing this sudden cost escalation is simply not viable. Margins are already thin,” S.C. Ralhan, president of the Federation of Indian Export Organizations, said in a statement.

    The Swiss executive branch, the Federal Council, was expected to meet Thursday after President Karin Keller-Sutter and other Swiss officials returned from a hastily arranged trip to Washington in a failed bid to avert a 39% U.S. tariffs on Swiss goods.

    Import taxes are still coming on pharmaceutical drugs, and Trump announced 100% tariffs on computer chips. That could leave the U.S. economy in a place of suspended animation as it awaits the impact.

    Stock market remains solid

    The president’s use of a 1977 law to declare an economic emergency to impose the tariffs is under a legal challenge. Even people who worked with Trump during his first term are skeptical, such as Paul Ryan, the Wisconsin Republican who was House speaker.

    “There’s no sort of rationale for this other than the president wanting to raise tariffs based upon his whims, his opinions,” Ryan told CNBC on Wednesday.

    Trump is aware of the risk that courts could overturn his tariffs. In a Truth Social tweet, he said, “THE ONLY THING THAT CAN STOP AMERICA’S GREATNESS WOULD BE A RADICAL LEFT COURT THAT WANTS TO SEE OUR COUNTRY FAIL!”

    The stock market has been solid during the tariff drama, with the S&P 500 index climbing more than 25% from its April low. The market’s rebound and the income tax cuts in Trump’s tax and spending measure signed into law on July 4 have given the White House confidence that economic growth is bound to accelerate in the coming months.

    On the global financial markets, indexes rose across much of Europe and Asia, while stocks were slipping on Wall Street.

    But ING’s Brzeski warned: “While financial markets seem to have grown numb to tariff announcements, let’s not forget that their adverse effects on economies will gradually unfold over time.”

    Trump foresees an economic boom. American voters and the rest of the world wait, nervously.

    “There’s one person who can afford to be cavalier about the uncertainty that he’s creating, and that’s Donald Trump,” said Rachel West, a senior fellow at The Century Foundation who worked in the Biden White House on labor policy. “The rest of Americans are already paying the price for that uncertainty.”

    ___

    Follow the AP’s coverage of President Donald Trump at https://apnews.com/hub/donald-trump.

    [ad_2]

    Source link

  • US and China extend trade truce another 90 days, easing tension between world’s largest economies

    [ad_1]

    WASHINGTON (AP) — President Donald Trump extended a trade truce with China for another 90 days Monday, at least delaying once again a dangerous showdown between the world’s two biggest economies.

    Trump posted on his Truth Social platform that he signed the executive order for the extension, and that “all other elements of the Agreement will remain the same.” Beijing at the same time also announced the extension of the tariff pause, according to the Ministry of Commerce.

    The previous deadline was set to expire at 12:01 a.m. Tuesday. Had that happened the U.S. could have ratcheted up taxes on Chinese imports from an already high 30%, and Beijing could have responded by raising retaliatory levies on U.S. exports to China.

    President Donald Trump speaks with reporters in the James Brady Press Briefing Room at the White House, Monday, Aug. 11, 2025, in Washington. (AP Photo/Alex Brandon)

    The pause buys time for the two countries to work out some of their differences, perhaps clearing the way for a summit later this year between Trump and Chinese President Xi Jinping, and it has been welcomed by the U.S. companies doing business with China.

    Sean Stein, president of the U.S.-China Business Council, said the extension is “critical” to give the two governments time to negotiate a trade agreement that U.S. businesses hope would improve their market access in China and provide the certainty needed for companies to make medium- and long-term plans.

    “Securing an agreement on fentanyl that leads to a reduction in U.S. tariffs and a rollback of China’s retaliatory measures is acutely needed to restart U.S. agriculture and energy exports,” Stein said.

    China said Tuesday it would extend relief to American companies who were placed on an export control list and an unreliable entities list. After Trump initially announced tariffs in April, China restricted exports of dual-use goods to some American companies, while banning others from trading or investing in China. The Ministry of Commerce said it would stop those restrictions for some companies, while giving others another 90-day extension.

    Reaching a pact with China remains unfinished business for Trump, who has already upended the global trading system by slapping double-digit taxes – tariffs – on almost every country on earth.

    The European Union, Japan and other trading partners agreed to lopsided trade deals with Trump, accepting once unthinkably U.S. high tariffs (15% on Japanese and EU imports, for instance) to ward off something worse.

    Trump’s trade policies have turned the United States from one of the most open economies in the world into a protectionist fortress. The average U.S. tariff has gone from around 2.5% at the start of the year to 18.6%, highest since 1933, according to the Budget Lab at Yale University.

    But China tested the limits of a U.S. trade policy built around using tariffs as a cudgel to beat concessions out of trading partners. Beijing had a cudgel of its own: cutting off or slowing access to its rare earths minerals and magnets – used in everything from electric vehicles to jet engines.

    In June, the two countries reached an agreement to ease tensions. The United States said it would pull back export restrictions on computer chip technology and ethane, a feedstock in petrochemical production. And China agreed to make it easier for U.S. firms to get access to rare earths.

    “The U.S. has realized it does not have the upper hand,’’ said Claire Reade, senior counsel at Arnold & Porter and former assistant U.S. trade representative for China affairs.

    In May, the U.S. and China had averted an economic catastrophe by reducing massive tariffs they’d slapped on each other’s products, which had reached as high as 145% against China and 125% against the U.S.

    Those triple-digit tariffs threatened to effectively end trade between the United States and China and caused a frightening sell-off in financial markets. In a May meeting in Geneva they agreed to back off and keep talking: America’s tariffs went back down to a still-high 30% and China’s to 10%.

    Having demonstrated their ability to hurt each other, they’ve been talking ever since.

    “By overestimating the ability of steep tariffs to induce economic concessions from China, the Trump administration has not only underscored the limits of unilateral U.S. leverage, but also given Beijing grounds for believing that it can indefinitely enjoy the upper hand in subsequent talks with Washington by threatening to curtail rare earth exports,’’ said Ali Wyne, a specialist in U.S.-China relations at the International Crisis Group. “The administration’s desire for a trade détente stems from the self-inflicted consequences of its earlier hubris.”

    It’s unclear whether Washington and Beijing can reach a grand bargain over America’s biggest grievances. Among these are lax Chinese protection of intellectual property rights and Beijing’s subsidies and other industrial policies that, the Americans say, give Chinese firms an unfair advantage in world markets and have contributed to a massive U.S. trade deficit with China of $262 billion last year.

    Reade doesn’t expect much beyond limited agreements such as the Chinese saying they will buy more American soybeans and promising to do more to stop the flow of chemicals used to make fentanyl and to allow the continued flow of rare-earth magnets.

    But the tougher issues will likely linger, and “the trade war will continue grinding ahead for years into the future,’’ said Jeff Moon, a former U.S. diplomat and trade official who now runs the China Moon Strategies consultancy.

    ___

    Associated Press Staff Writers Josh Boak and Huizhong Wu contributed to this story.

    [ad_2]

    Source link