US-China Trade Talks Continue With Truce Extension Seen as Likely
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Yahoo
25 minutes ago
- Yahoo
From Laos to Brazil, Trump's tariffs leave a lot of losers. But even the winners will pay a price
WASHINGTON (AP) — President Donald Trump's tariff onslaught this week left a lot of losers – from small, poor countries like Laos and Algeria to wealthy U.S. trading partners like Canada and Switzerland. They're now facing especially hefty taxes – tariff – on the products they export to the United States starting Aug. 7. The closest thing to winners may be the countries that caved to Trump's demands — and avoided even more pain. But it's unclear whether anyone will be able to claim victory in the long run — even the United States, the intended beneficiary of Trump's protectionist policies. 'In many respects, everybody's a loser here,'' said Barry Appleton, co-director of the Center for International Law at the New York Law School. Barely six months after he returned to the White House, Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. In its place is a system in which Trump himself sets the rules, using America's enormous economic power to punish countries that won't agree to one-sided trade deals and extracting huge concessions from the ones that do. 'The biggest winner is Trump,' said Alan Wolff, a former U.S. trade official and deputy director-general at the World Trade Organization. 'He bet that he could get other countries to the table on the basis of threats, and he succeeded – dramatically.'' Everything goes back to what Trump calls 'Liberation Day'' – April 2 – when the president announced 'reciprocal'' taxes of up to 50% on imports from countries with which the United States ran trade deficits and 10% 'baseline'' taxes on almost everyone else. He invoked a 1977 law to declare the trade deficit a national emergency that justified his sweeping import taxes. That allowed him to bypass Congress, which traditionally has had authority over taxes, including tariffs — all of which is now being challenged in court. Winners will still pay higher tariffs than before Trump took office Trump retreated temporarily after his Liberation Day announcement triggered a rout in financial markets and suspended the reciprocal tariffs for 90 days to give countries a chance to negotiate. Eventually, some of them did, caving to Trump's demands to pay what four months ago would have seemed unthinkably high tariffs for the privilege of continuing to sell into the vast American market. The United Kingdom agreed to 10% tariffs on its exports to the United States — up from 1.3% before Trump amped up his trade war with the world. The U.S. demanded concessions even though it had run a trade surplus, not a deficit, with the UK for 19 straight years. The European Union and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year — but lower than the tariffs he was threatening (30% on the EU and 25% on Japan). Also cutting deals with Trump and agreeing to hefty tariffs were Pakistan, South Korea, Vietnam, Indonesia and the Philippines. Even countries that saw their tariffs lowered from April without reaching a deal are still paying much higher tariffs than before Trump took office. Angola's tariff, for instance, dropped to 15% from 32% in April, but in 2022 it was less than 1.5%. And while Trump administration cut Taiwan's tariff to 20% from 32% in April, the pain will still be felt. '20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate,' Taiwan's president Lai Ching-te told reporters in Taipei Friday. Trump also agreed to reduce the tariff on the tiny southern African kingdom of Lesotho to 15% from the 50% he'd announced in April, but the damage may already have been done there. Bashing Brazil, clobbering Canada, shellacking the Swiss Countries that didn't knuckle under — and those that found other ways to incur Trump's wrath — got hit harder. Even some of the poor were not spared. Laos' annual economic output comes to $2,100 per person and Algeria's $5,600 — versus America's $75,000. Nonetheless, Laos got rocked with a 40% tariff and Algeria with a 30% levy. Trump slammed Brazil with a 50% import tax largely because he didn't like the way it was treating former Brazilian President Jair Bolsonaro, who is facing trial for trying to lose his electoral defeat in 2022. Never mind that the U.S. has exported more to Brazil than it's imported every year since 2007. Trump's decision to plaster a 35% tariff on longstanding U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu. Switzerland was clobbered with a 39% import tax — even higher than the 31% Trump originally announced on April 2. "The Swiss probably wish that they had camped in Washington'' to make a deal, said Wolff, now senior fellow at the Peterson Institute for International Economics. "They're clearly not at all happy.'' Fortunes may change if Trump's tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his Liberation Day tariffs exceeded his authority under the 1977 law. In May, the U.S. Court of International Trade, a specialized court in New York, agreed and blocked the tariffs, although the government was allowed to continue collecting them while its appeal wend its way through the legal system, and may likely end up at the U.S. Supreme Court. In a hearing Thursday, the judges on the U.S. Court of Appeals for the Federal Circuit sounded skeptical about Trump's justifications for the tariffs. 'If (the tariffs) get struck down, then maybe Brazil's a winner and not a loser,'' Appleton said. Paying more for knapsacks and video games Trump portrays his tariffs as a tax on foreign countries. But they are actually paid by import companies in the U.S. who try to pass along the cost to their customers via higher prices. True, tariffs can hurt other countries by forcing their exporters to cut prices and sacrifice profits — or risk losing market share in the United States. But economists at Goldman Sachs estimate that overseas exporters have absorbed just one-fifth of the rising costs from tariffs, while Americans and U.S. businesses have picked up the most of the tab. Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel and Stanley Black & Decker, have all hiked prices due to U.S. tariffs "This is a consumption tax, so it disproportionately affects those who have lower incomes,'' Appleton said. 'Sneakers, knapsacks ... your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to up because none of those are made in America.'' Trump's trade war has pushed the average U.S. tariff from 2.5% at the start of 2025 to 18.3% now, the highest since 1934, according to the Budget Lab at Yale University. And that will impose a $2,400 cost on the average household, the lab estimates. 'The U.S. consumer's a big loser,″ Wolff said. ____ AP Economics Writer Christopher Rugaber contributed to this story. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
27 minutes ago
- Bloomberg
The Fight Over Venezuela's Most Valuable Asset Is Heating Up
Welcome to The Brink. I'm Nicolle Yapur, a reporter in Bogota, where I'm following the auction for PDVSA's most valuable foreign asset. We also have news on the second-quarter's surge in defaults led by distressed private equity-backed firms bought with floating-rate loans before the Fed's hiking cycle began. Follow this link to subscribe. Send us feedback and tips at debtnews@ or DM. A legal fight over a unique bond issued by Venezuela 's state-owned oil company is heating up.
Yahoo
28 minutes ago
- Yahoo
Trump's Next Job: Selling Skeptical Americans on His Economy
(Bloomberg) -- Six months into his comeback term, Donald Trump has taken full ownership of the US economy. For better or worse, his party must now sell it to voters. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival We Should All Be Biking Along the Beach Seeking Relief From Heat and Smog, Cities Follow the Wind San Francisco in Talks With Vanderbilt for Downtown Campus The president has hailed the world's 'hottest' economy – and found others to blame for any wobbles. When Friday's jobs report showed a dramatic slowdown in hiring, he fired the head of the agency that published it. He's pinned some frustrations on his predecessor Joe Biden, and continues to berate the Federal Reserve for what he considers too-high interest rates. But for political purposes, his takeover has now been cemented — after passage of the 'One Big Beautiful Bill' tax-and-spending law, and the latest phase of his global tariff rollout. Commerce Secretary Howard Lutnick trumpeted the transition: 'The Trump Economy has officially arrived,' he posted on social media. The question is whether Americans like it. Next year Trump's economic record will be on the midterm ballot. Polls suggest voters are unhappy with the tariffs and tax plans — potentially giving Democrats an opening. The loss of GOP majorities in Congress could stall Trump's legislative agenda and expose him to impeachment efforts, as it did in his first term. The July employment figures, with job creation running at the weakest pace since the pandemic, were the latest indicator of a slowing economy. GDP shrank in the first quarter then rebounded in the second, as trade shifts skewed the numbers — but the overall pace in the first half of 2025 has been around half of last year's, with consumers hitting the brakes amid trade-war uncertainty. Still, unemployment remains low and so far there's been little sign of the tariff-led surge in prices that many pundits warn of. 'The economy has held up remarkably well. Inflation has stayed relatively tame. But I do think there are storm clouds on the horizon,' said Republican strategist Marc Short, who served in Trump's first administration. Many businesses have so far avoided passing on tariff costs to consumers, he said, but 'the frog has been boiling all along.' Trump announced another round of tariff hikes this week, after months of often chaotic threats and reversals. Almost all US trading partners now face higher rates. The import taxes are bringing in billions in government revenue, but the longer-term economic impact remains unclear. Critics say US consumers and businesses will foot the bill. A recent Fox News poll shows that 62% of voters disapprove of Trump's handling of tariffs – while 58% are against the tax and spending bill, and 55% are unhappy with his overall handling of the economy. Voters are especially sensitive to the cost of living right now after prices skyrocketed under the Biden administration. Fed Chair Jerome Powell has cited the risk that tariffs could rekindle inflation as one reason for holding interest rates steady – to Trump's fury. The president has campaigned aggressively for lower rates, hinting he may fire Powell before his term ends next May. On Friday he called on the Fed's board to 'assume control' if Powell doesn't deliver a cut. There were some signs in June's price data that tariffs are starting to nudge prices higher for products like furniture and appliances. Still, the White House has a decent story to tell, according to Republican strategist Alex Conant. 'I would certainly take this economy over two or three years ago,' he said. 'There are two things that crush a president, inflation or unemployment. Right now both are low.' Democrats see opportunities to go after Trump on his tax-and-spending legislation as well as his tariffs. The measure includes new breaks for tips and overtime pay – but also steep cuts to health programs that will hurt many low-income Americans. 'Our summer's all about Cancel The Cuts,' former House Speaker Nancy Pelosi said on social media. 'I'll be looking at how House and Senate Republicans fare back home as they try to sell the recent budget bill,' said Democratic strategist Jim Manley. 'If you look at the polling, Democrats have to focus on his handling of the economy, because Americans are not happy.' With tariffs largely in place, the White House in August plans to start promoting its tax law. State and local officials were at the White House this week getting briefed on the legislation, one official said. Another White House insider said Trump was expected to hit the road as part of the effort. 'Naysayers and Doomsayers' Key parts of the bill like the tips exemption are 'huge immediate political winners,' Conant said. 'They should not only run on them, they should attack Democrats for opposing them.' The law also extends tax cuts from Trump's first term, which had been due to expire. That's potentially the GOP's strongest argument to voters — 'if they'd not done it, can you imagine what your tax bill would've been like next April' — according to veteran Republican pollster Frank Luntz. 'They should be saying it, they're doing it to some degree,' he told Bloomberg TV on Friday. 'But it's not being heard.' The White House maintains that the economy is booming. 'All the naysayers and the doomsayers have been proven wrong,' Communications Director Stephen Cheung said. And Trump is pulling other levers to improve GOP chances in the midterms. He's raised $236 million for his political operation in the first six months of 2025 — an unprecedented sum for a second-term president. The latest filings to the Federal Election Commission suggest most of that cash will be available for GOP House and Senate candidates. Trump is also urging Texas lawmakers to redraw the state's congressional map in an effort to win House districts that are more favorable to Republicans — a move Democrats have decried as a power grab. Midterm elections historically favor the party out of power — potentially giving a boost to Democrats, who were soundly beaten in 2024. But the opposition party is also struggling in the polls, and hasn't coalesced around an effective appeal to voters. Former Chicago Mayor Rahm Emanuel, who has said he is considering a 2028 Democratic presidential bid, said the party has a clear economic message available for the midterms – which includes focusing on tariffs as an effective tax hike. 'This is all about accepting that Donald Trump owns this economy,' Emanuel said. How Podcast-Obsessed Tech Investors Made a New Media Industry Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Russia Builds a New Web Around Kremlin's Handpicked Super App It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts ©2025 Bloomberg L.P.
