29: Trade

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Trump got his tariff hike. The rest remains murky. He is taking a victory lap on his trade agenda after reaching deals with the EU and Japan, but it’s not clear how much countries have agreed to........ President Donald Trump is hiking global tariffs to levels not seen in a century — without triggering a major trade war. ........ The White House has claimed, triumphantly, that

the verbal agreements

the administration has reached in recent days with major trading partners like the European Union, Japan, the Philippines and others will result in major new trade opportunities for U.S. industries and unprecedented sums of foreign investment into the country. ........... the EU, Japan and other governments can’t guarantee the private-sector investments in the U.S. they have promised, and have competing interpretations of other major provisions of the deals as well. .............. The disagreements and lack of specifics — or written agreements of any kind — on the trade deals the White House has rolled out in recent weeks are raising doubts about how much Trump has really succeeded in lowering foreign barriers or drawing in foreign investment for U.S. businesses, even as he dramatically expands the protectionist policies that decades of American leaders had sought to knock down. ........... “I want to see the text and classified annexes of some of these agreements,” Sen. Thom Tillis (R-N.C.) said last week. .............

Of the six agreements Trump has reached with leading trade partners, only one is signed.

The Trump administration also reached a separate understanding with China to temporarily halt an escalating trade war, with a negotiating deadline extended to Aug. 12. ................ The one signed agreement, inked with the U.K. in May, was also light on details, with the implication that the two governments would negotiate further to implement the high-level commitments they made. .......... The terms Trump has outlined aren’t always echoed by the other party to the deals. .......... Trump indicated that Europe would be lowering its tariffs on U.S. goods to zero. But the EU later said it only applied to some products, like commercial aircraft and their components, while tariffs on industrial goods and agricultural products are still being worked out by the two countries. ........... “We strongly urge the White House to redouble its efforts to address EU policy and regulatory barriers to US digital and services trade, especially those that target US firms and treat them unfairly,” said Christine Bliss, the president of the Coalition of Services Industries, which represents Microsoft, Amazon, Google and Facebook, among other tech companies.......... Trump said Sunday that the EU would also buy “vast amounts” of American weapons worth “hundreds of billions,” but on Monday, European officials quietly clarified nothing concrete on arms had been agreed. ......... “Arms procurement is not a matter for the Commission,” one senior EU official told reporters. “This was more an expression of expectation on the part of President Trump .......... A senior European Commission official also acknowledged that the EU’s commitment to make $600 billion in new investments in the U.S. by 2028 is “based on the intentions of the private companies,” over which Brussels has no authority. And experts say it will be virtually impossible for EU member countries to purchase $750 billion in U.S. energy ................

Hitting that target would require the EU to triple its U.S. energy imports, based on last year’s figures, while asking American firms to divert all their energy flows worldwide towards the bloc instead — and then some.

............... “We don’t know the details of the agreement. … I imagine it will be somewhat general, and it will indicate a direction for further travel.” ............... There are similar questions around Japan’s pledge to invest $550 billion in the U.S., a move that Trump heralded as unprecedented. A White House official confirmed that details were still being worked out on the Japan deal. ............ That’s not exactly how Japanese Prime Minister Shigeru Ishiba described it in a press conference late last week, where he said the money would include “loans and investments” ............. “The $550 billion — we still don’t know how it looks,” Kristi Govella, Japan Chair at the Center for Strategic and International Studies, a D.C.-based think tank, said in an interview. “On the Japanese side, it seems to be described as more of a company-led endeavor that the Japanese government supports with loans and other assistance.” ............... If and when the deal is formalized in writing, it will have to win approval in Japan’s parliament, which is not guaranteed, given that the body will soon see an influx of populist lawmakers from the far-right Sanseito party, who won elections earlier this month by promising to focus on “Japanese First.” .................. “But it really depends on the details, which we don’t really have at the moment.” .......... Vietnam, meanwhile, has still not confirmed the U.S. tariff rate that Trump claimed the country agreed to in an announcement he made on social media earlier this month. The White House has yet to release details of the deal with the Philippines the president unveiled July 22, including any clarity regarding a vague promise to “work together Militarily,” as Trump posted on Truth Social. ............. The Indonesian government, meanwhile, is disputing the claim, included in a White House statement released last week, that it agreed to “remove restrictions on exports to the United States of industrial commodities, including critical minerals.” ............. Indonesia would only be exporting “processed minerals,” not the raw nickel ore itself. If true, U.S. steel industry officials say that would make the deal far less significant from their point of view. ................ “These countries made these agreements,” the White House officials said. “We expect them to abide by their commitments and if they reneg, the president reserves the ability to raise their tariffs again.” ............ and the EU promised to eliminate tariffs on U.S. cars, which should help German companies that manufacture in the U.S. .......... Over close to a century now, the U.S. kept its tariffs around 2 percent, part of a system it helped create after World War II to foster integrated global supply chains, lower prices and expand consumer choice. ................ Trump’s duties have also led to an influx of new tariff revenue — paid by the people and companies importing foreign goods (and not, as Trump regularly asserts, foreign governments) — coming into the country. In just a few months, the tariffs have brought in more than $136 billion, with the higher rates still yet to take effect. ................. Trump’s trade policies have yet to drive a surge in consumer prices ...... companies loaded up on inventory early in the year and some have thus far absorbed the costs .......... “I observed this a few months ago, that the American approach has changed,” Canadian Prime Minister Mark Carney told reporters Monday. “It is no longer an approach that hinges on integration. It’s a tariff-based approach for several sectors.”

ICE agents arrest Oregon doctor as he drops off kid at preschool Khanbabazadeh entered the U.S. on a student visa from Iran. He and his wife, who is a U.S. citizen, were interviewed by immigration authorities earlier this year as part of his process of applying for a green card, or permanent residency in the U.S. The application was all but complete and was only awaiting final approval. An ICE spokesperson claimed he had overstayed his student visa, but according to Khanbabazadeh’s wife, he’s always maintained lawful status in the U.S. .......... Rather than taking Khanbabazadeh to the nearby Portland ICE facility, they instead sent him 150 miles away to the Tacoma, Wash., detention center, making it harder for family and attorneys to gain access to him. ........ It all sounds dystopian, but the level of callous suffering being caused is only comparable to fiction for people in the quiet suburbs of Beaverton.

Who are the winners and losers in US-EU trade deal? It actually resembles the framework for an agreement rather than a full trade deal, with details still unclear. ........ with instant analysis by Capital Economics suggesting a 0.5% knock to GDP. .......... But the glowing headlines for Trump may not last long if a slew of economic data due later this week show that his radical reshaping of the US economy is backfiring......... Figures on inflation, jobs, growth and consumer confidence will give a clearer picture on whether Trump's tariffs are delivering pain or gain. ........... a 15% tariff means that a $100 product imported to the US from the EU will have a $15 dollar tax added on top - taking the total cost to the importer to $115. .......... Companies who bring foreign goods into the US have to pay the tax to the government, and they often pass some or all of the extra cost on to customers. ..............

The deal will need to be signed off by all 27 members of the EU, each of which have differing interests and levels of reliance on the export of goods to the US.

......... French Prime Minister Francois Bayrou commented: "It is a dark day when an alliance of free peoples, brought together to affirm their common values and to defend their common interests, resigns itself to submission." ......... He was joined by at least two other French government ministers as well as Viktor Orban, the Hungarian leader, who said that Trump "ate von der Leyen for breakfast". ............ even a rate of 15% would "cost the German automotive industry billions annually". .............. the pact is not all good news when it comes to domestic sales. That is down to the complex way that American cars are put together......... Many of them are actually assembled abroad - in Canada and Mexico - and Trump subjects them to a tariff of 25% when they are brought into the US. That compares with a lower tariff rate of 15% on EU vehicles. So US car makers may now fear being undercut by European manufacturers.......... "We will replace Russian gas and oil with significant purchases of US LNG [liquified natural gas], oil and nuclear fuels," said Von der Leyen.

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Trump is getting the world economy he wants — but the risk to growth could spoil his victory lap For Trump, the agreements driven by a mix of threats and cajoling, are a fulfillment of a decades-long belief in protectionism and a massive gamble that it will pay off politically and economically with American consumers. ........ But there’s no guarantee that Trump’s radical overhaul of U.S. trade policy will deliver the happy ending he’s promised. The framework agreement was exceedingly spare on details. Most trade deals require months and even years of painstaking negotiation that rise and fall on granular details. .......... a world in which U.S. import taxes — tariffs — are at the highest rates they’ve been in roughly 90 years ............. Outside economists say that high tariffs are still likely to raise prices for American consumers, dampen the Federal Reserve’s ability to lower interest rates and make the U.S. economy less efficient over time. Democrats say the middle class and poor will ultimately pay for the tariffs. ........... The U.S. president has long claimed that America erred by not taking advantage of its clout as the world’s biggest economy and erecting a wall of tariffs, in effect making other countries ante up for access to America’s massive consumer market. ......... To his closest aides, Trump’s use of tariffs has validated their trust in his skills as a negotiator and their belief that the economists who warned of downturns and inflation were wrong. .............

“Where are the ‘experts’ now?” Commerce Secretary Howard Lutnick posted on X.

............. many of the details of Trump’s trade deals remain somewhat hazy and have not been captured in writing. The U.S. and Japan, for instance, have offered differing descriptions of Japan’s agreement to invest $550 billion in the United States. .......... “The trade deals do seem to count as a qualified win for Trump, with other countries giving the U.S. favorable trade terms while accepting U.S. tariffs,” said Eswar Prasad, a Cornell University economist. “However, certain terms of the deals, such as other countries’ investments in the U.S., seem more promising in the abstract than they might prove in reality over time.” ............. Trump is also facing a court challenge from states and businesses arguing that the president overstepped his authority by declaring national emergencies to justify the tariffs on most of the world’s economies. In May, a federal court struck down those tariffs. And an appeals court, which agreed to let the government continue collecting the tariffs for now, will hear oral arguments in the case Thursday. ........... “the most likely outcome is slow growth and firm inflation,” but not a recession. .......... The administration has said the lack of auto price increases suggests that foreign producers are absorbing the costs, but it might ultimately just reflect the buildup of auto inventories to front-run the import taxes. ........ “Dealers built stocks ahead of tariff implementation, damping the immediate impact on retail prices. That cushion is starting to wear thin,” Morgan Stanley said in a separate note. “Our Japan auto analyst notes that as pre-tariff inventory clears, replacement vehicles will likely carry higher price tags.” .........

the United States’ effective tariff rate has risen to 17.5% from around 2.5% at the start of the year.......... “I wouldn’t take a victory lap,” Zandi said. “The economic damage caused by the higher tariffs will mount in the coming months.”

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‘Donaldddddd’: Foreign leaders schmooze Trump on his personal cell Trump’s personal cell diplomacy: Less briefing books, more calls and texts. ........ During his first term, President Donald Trump surprised a number of world leaders by offering his cell phone number, urging them to ditch the usual diplomatic protocols and simply call him up........ Trump’s affinity for frequent, often informal chit-chat is now a well-established aspect of his personality. And six months into his second term, world leaders, who want to remain in the president’s good graces, regularly call and text — sometimes to discuss matters of global import, sometimes just to schmooze. ........ Those leaders include French President Emmanuel Macron, Saudi Crown Prince Mohammed bin Salman and British Prime Minister Keir Starmer ......... The informality of these conversations, although hardly different from the off-the-cuff style Trump often showcases in public settings, can still be striking to aides listening on the other end of the line. A person familiar with one of the president’s conversations with Macron recalled the two leaders “bro-ing out” as they greeted one another. ......... “It was oddly amusing — Trump would say “Emmanuellllll” and really draw out the L, and then Macron would go, ‘Donaldddddd’ and draw out the D,” they recalled. “And it sort of went back and forth.” ............. One European official pointed to last month’s NATO leaders summit in the Netherlands, where Trump announced that he’d changed his mind about the alliance after meeting with cohorts he lauded as “great leaders.” He told reporters that he was departing feeling “differently” and had determined that the cause of European security was “not a rip-off.” And since then, he has agreed to authorize more defense aid for Ukraine so long as Europe foots the bill. ....... In the spring, after Mark Carney got elected largely on his promise to play hardball with Trump, Sen. Kevin Cramer (R-N.D.) urged the Canadian prime minister to just call Trump directly to work things out. .............

“Donald Trump likes that,” Cramer said at the time. “He’s flattered by direct phone calls.”

.......... In early March, Starmer used WhatsApp to message Trump as he sought to repair the breach between Trump and Ukrainian President Volodymyr Zelenskyy following their disastrous Oval Office meeting. ............. Starmer, who colleagues describe as buttoned-up at work and personable in private, understands the importance of a personal relationship with Trump and worked hard with aides on showing the president his more relaxed side, according to two people with knowledge of his foreign policy strategy............... Trump, said one of the three people familiar with the calls, often initiates calls with bin Salman, Starmer and Israeli Prime Minister Benjamin Netanyahu. ............. Once, when Starmer was meeting with Trump’s special envoy to the United Kingdom, Mark Burnett, the former “The Apprentice” executive producer dialed up Trump and handed over the phone midway through their meal. .......... The spontaneity, like most engagements with the president, is largely on his terms. Finnish President Alexander Stubb, for example, flew to Florida to play a round of golf with Trump. ........... And when Trump screenshotted and posted an effusive series of text messages from NATO Secretary General Mark Rutte on the eve of last month’s summit, crediting him for the alliance’s adoption of a new defense spending pledge, it served as a reminder to other heads of state who frequently text the president that their confidential conversations could become public. ......... On Friday when Trump was asked about Macron announcing that France will recognize Palestinian statehood amid Gaza’s continued bombardment by Israel, he shrugged it off. “He’s a very good guy, I like him,” Trump said of Macron. “But that statement doesn’t carry any weight.”