The US economy has weathered recent challenges, including higher tariffs on imported goods and a Middle East crisis. However, critical deadlines loom on the horizon, which could impact the economy.
President Donald Trump’s 90-day pause on tariffs on dozens of America’s trading partners will expire on July 9. If countries fail to reach trade deals with the US, they may face higher tariffs. Additionally, the government is expected to default on its debt obligations in August, unless Congress raises the debt ceiling by then.
The consequences of a US debt default are severe and could cause global economic upheaval. Treasury Secretary Scott Bessent has urged lawmakers to raise the debt ceiling before their one-month recess starts on August 4.
Trump’s “One Big, Beautiful Bill” includes raising the nation’s borrowing limit, as well as other measures. However, the president has pressured Congress to raise the debt ceiling by July 4. The fate of the US economy depends on how the Trump administration handles trade policy.
Economists warn that higher tariffs could lead to increased inflation, which is already showing signs of rising. If more tariffs are reinstated, it could exacerbate this trend. Meanwhile, a fragile ceasefire between Iran and Israel could quickly become undone, potentially leading to oil price spikes.
The number of people receiving unemployment benefits has hit a four-year high, and consumers are reining in their spending. These factors could rapidly evolve into economic fault lines if not addressed. As Treasury Secretary Bessent noted, the outcome will depend on how the Trump administration handles trade policy.
Experts anticipate higher prices in the coming months, regardless of the deadline’s impact. If more tariffs come back into effect, it could push inflation towards 4% by the end of the year. The latest Consumer Price Index report showed a 2.4% annual rate in May.
Source: https://edition.cnn.com/2025/06/30/economy/trump-summer-of-economic-hell