SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
trade war
Economists Pan 'Insane' New Trump Tariffs as US Consumers Struggle With Rising Prices
"Trump's definition of 'winning' is hitting the American people with ever-higher taxes," said economist Dean Baker.
Aug 01, 2025
U.S. President Donald Trump on Thursday used emergency authority to impose high tariff rates on imports from dozens of American trading partners, including Canada—a move that economists criticized as a senseless approach to global trade that will further increase costs for consumers who are already struggling to get by.
Trump outlined the new tariff rates in executive orders signed just ahead of his arbitrary August 1 deadline for U.S. trading partners to negotiate a deal with the White House, whose erratic, aggressive, and legally dubious approach has alarmed world leaders.
Under the president's new orders, Canadian goods that are not covered by the U.S.-Mexico-Canada Agreement (USMCA) will face 35% import duties, while steel and aluminum imports will face a 50% tariff rate.
Trump claimed Canada "has failed to cooperate in curbing the ongoing flood of fentanyl and other illicit drugs." But Canadian Prime Minister Mark Carney hit back in a statement early Friday, noting that Canada "accounts for only 1% of U.S. fentanyl imports and has been working intensively to further reduce these volumes."
"While we will continue to negotiate with the United States on our trading relationship, the Canadian government is laser-focused on what we can control: building Canada strong," Carney added. "Canadians will be our own best customer, creating more well-paying careers at home, as we strengthen and diversify our trading partnerships throughout the world."
Economist Brad Setser said that while the impact of the higher tariff on Canadian imports could be muted because of the exemption of USMCA-covered products such as oil, the 35% rate is still "insane" and "dumb."
"Same with the high tariff on Switzerland. Crazy," Setser wrote, pointing to the 39% rate for Switzerland imports. "This isn't just protectionism, it is bad protectionism—and will have all sorts of unintended consequences."
The new tariff rates for Canadian goods will take effect Friday while the higher rates for other nations such as Brazil (50%), India (25%), and Vietnam (20%) won't kick in until next week "to give Customs and Border Protection officials time to prepare," The Washington Post reported. Customs and Border Protection collects tariffs, which are effectively taxes paid by importers—who often pass those costs onto consumers in the form of higher prices.
"Trump's definition of 'winning' is hitting the American people with ever-higher taxes," Dean Baker, senior economist at the Center for Economic and Policy Research, wrote late Thursday.
Recent U.S. economic data indicates that Trump's tariffs are already putting upward pressure on prices—and companies are using the president's trade chaos as an excuse to drive up prices further and pad their bottom lines.
The Tax Foundation noted earlier this week that "a variety of food imports" will be impacted by Trump's tariffs, likely leading to "higher food prices for consumers." More than 80% of Americans are already concerned about the price of groceries and many are struggling to stay afloat, according to survey data released Thursday by The Century Foundation.
Baker warned Thursday that even nations that have agreed to trade frameworks with the U.S. are not out of the woods.
"Deals are meaningless to Trump. He'll break them in a second any time he feels like it," Baker wrote. "I trust everyone negotiating with Trump understands that fact."
Keep ReadingShow Less
'Simply Empowers the Bully': EU Leader Faces Backlash Over Trump Trade Deal
"Von der Leyen has just handed Trump the biggest victory he could hope for," said one critic. "We will all pay the price because in the process, she has strengthened him and his fascist project. Deeply depressing."
Jul 28, 2025
The leadership of the European Union on Sunday struck a deal with U.S. President Donald Trump that will leave tariffs significantly higher for many of the bloc's exports—including cars, pharmaceuticals, and semiconductors—and at 50% for steel and aluminum.
News of the deal was met with sharp criticism, including from some European officials. François Bayrou, France's prime minister, wrote on social media that "it is a dark day when an alliance of free peoples, gathered to affirm their values and defend their interests, resolves to submission."
Nick Dearden, director of the United Kingdom-based advocacy group Global Justice Now, warned that European Commission President Ursula von der Leyen "has just handed Trump the biggest victory he could hope for."
"We will all pay the price because in the process, she has strengthened him and his fascist project. Deeply depressing," Dearden wrote, arguing that the deal "simply empowers the bully" and likely won't last.
In her statement announcing the agreement with Trump, von der Leyen suggested the deal would avert further escalations from the U.S. president and bring "stability" to markets unsettled by his erratic threats.
"Today with this deal, we are creating more predictability for our businesses," she said. "In these turbulent times, this is necessary for our companies to be able to plan and invest."
The sweeping 15% tariff on E.U. products entering the U.S. is half the rate that the president threatened to impose earlier this month, but it is far higher than the estimated 1.5% rate prior to Trump's second White House term. The E.U. is the United States' largest trading partner.
Cailin Birch, global economist at the London-based Economist Intelligence Unit, told CNBC that while the deal represents "a climb down from a much worse place," the 15% tariff "is still a big escalation from where we were pre-Trump 2.0."
Wolfgang Niedermark, a board member of the Federation of German Industries, called the deal "an inadequate compromise" that "will have a huge negative impact on Germany's export-oriented industry."
Trump and his team wasted no time bragging in bombastic terms about the agreement. Trump called it "probably the biggest deal ever reached in any capacity, trade or beyond trade," while the president's deputy chief of staff gushed that it is "impossible to overstate what a staggering achievement President Trump delivered for America today."
" Stephen Miller is boasting about Trump hitting us with a HUGE tax increase," responded economist Dean Baker, alluding to the fact that tariffs are often passed to consumers in the form of higher prices.
As part of the agreement, the E.U. pledged to buy $750 billion worth of U.S. energy over three years—including LNG and oil.
Andreas Sieber, associate director of policy and campaigns at 350.org, said in a statement Monday that "it's deeply shortsighted to see the E.U. strike a so-called 'deal' with the U.S. that locks us into expensive, polluting gas."
"Fossil gas is not only worse for the climate than coal, it comes at a higher cost," said Sieber. "This risks locking Europe into decades of fossil fuel dependence, volatile energy bills, and accelerating the wildfires and flooding already wreaking havoc across the continent. While Trump celebrates this as a win, communities on both sides of the Atlantic are suffering with deadly climate impacts."
Keep ReadingShow Less
Brazilians Rally Around Lula After Trump Tariff Threat
"True Brazlians... do not let yourselves be the dogs of an American president who shames the ideas of democracy," wrote the editors of a major Brazilian newspaper.
Jul 10, 2025
Brazilian President Luiz Inácio Lula da Silva may have gotten a political boost thanks to the intervention of U.S. President Donald Trump.
On Wednesday, Trump announced he was slapping all Brazilian imports with a 50% tariff to protest the criminal trial of former Brazilian President Jair Bolsonaro, a longtime Trump ally who was indicted on charges related to an alleged coup plot to illegally remain in power after he lost the 2022 general election.
However, it does not appear that Trump's intervention into Brazil's domestic politics is helping Bolsonaro in the court of public opinion and Brazilian publication Globo reports that Brazilians have been swarming the U.S. president's Instagram account and leaving messages telling him to "leave Brazil in peace" while insisting their country is "not a lawless land."
In an analysis piece published by the São Paulo-based Folha, journalist Igor Gielow declared that Bolsonaro was an "immediate loser" of Trump's decision, as in the past he has declared Trump to be his political idol and the two are generally seen as joined at the hip. What's more, Gielow argues that the Trump tariffs are most likely to hurt Brazil's agribusiness sector, which is where the core of Bolsonaro's political support lies.
Lorrena Rodrigues, a columnist at the more conservative newspaper Estadão, argued that Trump had given a "gift" to Lula by giving his party the opportunity to focus public attention away from domestic problems and "to exploit a patriotism that used to be the monopoly" of the country's right-wing opposition party.
Rodrigues also said that Trump's tariffs against Brazil had no economic justification given that the United States runs a trade surplus with the country, which makes it seem as though Trump "wants to interfere in the internal politics and the justice system of Brazil through international commerce," which is not something likely to be popular in the country.
A leading editorial published in Estadão delivered even harsher criticism of the American president, whom it likened to a member of the mafia.
"Trump is using the threat of import tariffs on Brazil to obligate the country to surrender to his absurd demands," wrote the editors, who further said that Trump "lied shamelessly in his letter to justify the drastic measure" he imposed on Brazil. The editorial concluded by imploring "true Brazilians" to "not let yourselves be the dogs of an American president who shames the ideas of democracy."
Globo also reports that members of the conservative opposition party held an emergency meeting to discuss how to respond politically to Trump's tariffs. One unnamed Senate leader who spoke with the publication described Trump's surprise announcement as "a shot in the foot."
"Who's going to be in favor of this?" the Senate leader wondered. "Who's going to go against their own country?"
Brazilians have for decades been suspicious of the United States' intentions toward their national sovereignty since the U.S. backed a military coup in 1964 that ousted its democratically elected left-wing government and replaced it with a dictatorship that lasted for more than two decades.
Keep ReadingShow Less
Most Popular