Prime Highlights
- President Trump has made it official that new tariffs on some nations will be implemented starting August 1 with no more delays.
- Copper and medicines are the target imports with tariffs of up to 200%.
Key Fact
- 14 nations, including close allies, are targeted in the new tariff policy, and inflationary tariffs are brought down to the BRICS nations as well.
- Copper prices have skyrocketed due to expectations of hitting all-time highs.
Key Background
Distracted President Donald Trump reaffirmed a firm Aug. 1 deadline for instituting broad tariffs on imports of numerous products, promising no more delays. In letters to the leaders of 14 countries, including key allies like Japan and South Korea, Trump declared that any expectations of delays were mistaken. Those tariffs, originally postponed to July 9, are designed to punish what he has called “unfair trade practices” and are part of the larger trend of economic nationalism.
Those impending tariffs consist of country and sector-specific measures. Countries like China in the threat will face 25% to 40% levies depending on the country and category of the imports. Besides these specific measures, Trump is invoking national security under Section 232 to impose a 50% tariff on foreign copper imports. The action catapulted copper futures to new highs, as copper surged 13% in a single session to all-time records. Pharmaceuticals are also under investigation, with tariffs ranging up to 200% after grace periods.
These combative trade actions are all components of Trump’s overall America First economic policy, one that he is likely to advance forcefully once more in his 2024 re-election campaign. Although market fluctuations have thus far remained modestly contained, economists say there are warnings of impending inflation and supply-chain disruptions if tariffs are imposed as scheduled. And yet investor sentiment is showing a fear that Trump will fold—what the analysts have dubbed the “TACO” effect, or “Trump Always Chickens Out.”
Trump’s rhetoric, however, has continued unabated. By presenting such tariffs as an issue of national security and economic justice, he seems intent to reframe the terms of global trade. The August 1 deadline is presented as an absolute pivot point, harking back to the Trump administration’s hardline trade approach in its initial time in office.
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