US trade policy has reached a liminal state, with high tariffs on major trading partners looming but not yet set to take effect. The latest development is the announcement of new tariffs on imports from Japan and South Korea by President Trump.
These tariffs, which were originally announced in April, will increase the average effective tariff rate on US imports to 17.6%, the highest since 1934. If sustained, they would translate to a 1.7% rise in consumer prices, costing the average household $2,300 per year.
The good news for American consumers and businesses is that potential price shocks and disruptions from an all-out global trade war remain at bay – for now. However, the new tariffs do pose a risk to companies making long-term investments, as they would likely increase production costs.
Markets have largely shrugged off the threats, betting that Trump envisions further deal-making ahead. Stock, bond, and currency markets have seen only modest moves on the news, in contrast to their early April sell-off.
The administration’s latest move has been described as “Schrodinger’s Tariffs,” simultaneously alive and dead, by experts. While there is reason to believe that Trump’s letters are a negotiating strategy, they also serve as a warning sign about the new global trade landscape.
Business leaders are waiting for clarity on where tariffs will settle so they can adapt their supply chains and pricing accordingly. With the July 9 deadline for those deals passing with little certainty, many fear that the trade wars started when Donald Trump took office don’t have a firm end date.
Treasury Secretary Scott Bessent has said that trade announcements are expected in the next 48 hours, while Trump has threatened to impose additional tariffs on individual sectors and “BRICS” countries ahead of their annual gathering.
Source: https://www.axios.com/2025/07/08/trump-tariffs-august-1-deadline