Latest news with #ArtoftheDeal
Business Times
08-07-2025
- Business
- Business Times
America's copy-and-paste tariffs will rile ‘Mr Japan'
'YOU will never be disappointed with The United States of America.' So went US President Donald Trump's sign-off in his letters issued to 14 trading partners on Monday (Jul 7). But in Tokyo, Prime Minister Shigeru Ishiba will be more than disappointed. He's entitled to be furious. Japan was among the first countries to begin talks after April's 'Liberation Day' tariff announcement. It has spent months in negotiations, with Ishiba's envoy making seven trips to the US for talks with Trump and other officials. The nation has been the largest investor in the US for the past five years and is a crucial security ally. All that only to end up with a tariff rate 1 percentage point higher than first proposed three months ago. To add insult to injury, Japan was lumped in with countries that are far less vital partners, including Kazakhstan and Myanmar. While the threatened rates to be enacted on Aug 1 were different between countries, the copy-and-paste wording sent to the respective leaders was virtually identical, including telling Tokyo to open its 'heretofore closed trading markets' – whatever that means. The warning signs were there after Trump erupted last week. Overnight, it seemed, Japan went from being respected, or 'tough', in Trump parlance, to being 'spoiled'. And while 'Mr Japan', as Trump seemingly dubbed Ishiba, may not have ended up with the 35 per cent tariffs once threatened, months of talks have only led to further threats. In Seoul, recently elected President Lee Jae Myung might be feeling hard done by, too. His country is moving to address US concerns over non-tariff barriers, but has been hampered by the political turmoil prior to Lee's election. Japan might have thought it was getting the first-mover advantage Treasury Secretary Scott Bessent promised to countries that came to the negotiating table fast. Instead, an identical rate has been levied on both countries. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Markets in Tokyo and Seoul barely skipped a beat, buying into the TACO (Trump Always Chickens Out) trade as it quickly became clear that the letter was, in effect, an extension of the Jul 9 deadline. Trump's further suggestions that the deadline wasn't '100 per cent firm' make this clearly the latest in his 'Art of the Deal' brinkmanship to wring out more concessions. And in Japan's case, Trump's 25 per cent auto tariffs – the elimination of which is Ishiba's primary goal – are already in effect. That's why the longest-lasting impact of Monday's announcement will be to further chip away at trust between Washington's most vital partner in staring down China. The prime minister has stood surprisingly firm in the talks, while making good-faith efforts to engage with the US. But might his engagement have been too earnest? Flattery and a bit of exaggeration may have been the better way to go, perhaps taking a page out of SoftBank Group founder Masayoshi Son's handbook in dealing with the president. This might help sidestep Tokyo's biggest problem: the difficulty in understanding what Trump actually wants. Local media have already reported how officials have been baffled by the open disagreements between the US negotiators. A vague hand wave – promises to place a Ford F-150 in every Japanese garage, or whatever Trump wants to hear – might be a better way to buy time. Trump is clearly pulling out the seat at the negotiating table. But Ishiba already has his hands full with crucial Upper House elections on Jul 20, where he can't be seen to be giving concessions or selling rice farmers down the river. Still, the latest move could even be advantageous to him; after all, no one likes a bully. Meanwhile, any expectations that the Bank of Japan will hike rates later this month – at a meeting scheduled the day before the tariffs come into effect – should prepare for disappointment. The longer-term consequences are harder to read. It's possible, even likely, that Trump will have another of his trademark changes of heart, and suddenly Japan, South Korea, and the other trading partners will be US friends again. Constantly kicking the can down the road indicates he doesn't really want to follow through with his threats. But such incessant bluster chips away at goodwill built up between the partners over decades. And that's something that can't simply be copied and pasted. BLOOMBERG
The Age
08-07-2025
- Business
- The Age
Trump declared an auction but no bidders turned up
In other words, Trump, having failed so far to bully countries into offering him the one-sided concessions he has been demanding, is effectively extending his deadline and the period for negotiations yet again, indefinitely. So much for '90 deals in 90 days' and the 'Art of the Deal.' Loading In turns out that trade negotiations are more complicated, and his tariffs less intimidating, that he thought. Most trade deals take years, not months, to negotiate. What's particularly significant about the first round of letters, apart from official communications between heads of state being posted on a privately-owned social media site, is that they target two of America's major trading partners and closest allies. Japan and South Korea between them generate nearly 10 per cent of US goods imports and are major investors within the US. Japan is the largest foreign investor in US Treasury bonds, with holdings of more than $US1 trillion, and its auto companies alone have invested about $US62 billion ($A95 billion) in the US auto industry. South Korean companies have invested close to $US115 billion in the US over the past three years and its Hyundai auto group, by itself, has said it will invest $US21 billion in its US business over the next three years. South Korea has, or thought it had, a free trade agreement with the US. Both countries are critical to America's ambitions of containing China's ambitions in the Asia Pacific region and both have co-operated – at some cost to their companies and economies – with US attempts to curtail China's access to the most advanced semiconductors, the building blocks for most advanced industrial and military technologies. It's insulting to those countries for Trump to say, as he did, that it was 'a great honour' for him to send their leaders letters threatening them with punitive tariffs unless they bend to his will or to say that the letters demonstrate 'the strength and commitment of our Trading Relationships.' He's invited those countries, among America's closest trade and security partners, to 'participate in the extraordinary Economy of the United States, the Number One Market in the World, by far.' They could be forgiven for thinking that they already do. Loading Yes, they, like the other countries being targeted with the so-called reciprocal tariffs – Thailand (36 per cent rate), Indonesia (32 per cent), Malaysia (25 per ent) and South Africa (30 per cent) were among the others – have trade surpluses with the US, which in Trump's mind means they are ripping the US off via unfair trade practices. The view of most non-MAGA trade economists, however, is that the $US1.2 trillion US trade deficit in goods has more to do with Americans spending more than they produce – living beyond their means – than it does with unfair trade practices. In the letters, Trump described the deficits as 'unsustainable' and a major threat to the US economy and national security. The reality is that America's last trade surplus was in 1975, so for half a century America has sustained, and generally prospered despite those trade deficits without them threatening its national security. Trump's tariffs will raise the prices for imported goods for consumers, input costs for its manufacturers and disrupt its companies supply chains. Those effects will occur in the near term. Trump keeps asserting that the countries subjected to the tariffs will pay them but it is America and Americans that will have to absorb the cost of raising the duties paid by its importers from less than the 2.5 per cent effective average rate before Trump embarked on his trade war to something, once the reciprocal and sectoral tariffs are factored in, that could be well above 20 per cent. While the objective of the tariff policy is ostensibly to coerce foreign companies into investing in domestic manufacturing within the US, even if that were successful (and any success is likely to be relatively modest) it would take years for new plants to be constructed and skilled workforces to be assembled and, almost by definition, the costs of the end products would be higher than those of the imports they displace. The more likely 'success' the policy might have in reducing the US trade deficit is if it ignites stagflation – reduced economic growth but increased inflation – and a recession that pulls US living standards and consumption and the demand for imported goods down. Trade wars are mutually destructive, with everyone losing. In America's case, the damage will be self-inflicted. Trump's obsession with Tariffs also betrays a misunderstanding of the nature of today's US economy. He's fixated on the trade deficit in goods, but the US economy is services-based. More than 75 per cent of US GDP is generated by the services sector; less than 25 per cent by goods-producing sectors. America has a trade surplus in services. In the letters, Trump warns that goods that are transhipped – goods that originate in a third country, which means China – will face an even higher tariff. That was a feature of last week's deal, or at least the framework of a deal, the US announced it has reached with Vietnam, where the 'reciprocal' rate of 20 per cent would be doubled for transhipped goods. He also threatened that, should the countries raise their own tariffs in response to US tariffs, that rate would be added to the rate the US charges. Japan and South Korea stand out within the list of countries that were sent the Trump letters, most of which are smaller and have smaller trade volumes with the US. The size and nature of their economies and their strategic relationships with the US and its other allies have, over decades, classified them as among America's friends. With 'friends' like this, America's 'enemies' – China and, potentially, the BRICs grouping of developing economies that includes China and Russia – would be excited by the prospect of America's self-induced isolation.
Sydney Morning Herald
08-07-2025
- Business
- Sydney Morning Herald
Trump declared an auction but no bidders turned up
In other words, Trump, having failed so far to bully countries into offering him the one-sided concessions he has been demanding, is effectively extending his deadline and the period for negotiations yet again, indefinitely. So much for '90 deals in 90 days' and the 'Art of the Deal.' Loading In turns out that trade negotiations are more complicated, and his tariffs less intimidating, that he thought. Most trade deals take years, not months, to negotiate. What's particularly significant about the first round of letters, apart from official communications between heads of state being posted on a privately-owned social media site, is that they target two of America's major trading partners and closest allies. Japan and South Korea between them generate nearly 10 per cent of US goods imports and are major investors within the US. Japan is the largest foreign investor in US Treasury bonds, with holdings of more than $US1 trillion, and its auto companies alone have invested about $US62 billion ($A95 billion) in the US auto industry. South Korean companies have invested close to $US115 billion in the US over the past three years and its Hyundai auto group, by itself, has said it will invest $US21 billion in its US business over the next three years. South Korea has, or thought it had, a free trade agreement with the US. Both countries are critical to America's ambitions of containing China's ambitions in the Asia Pacific region and both have co-operated – at some cost to their companies and economies – with US attempts to curtail China's access to the most advanced semiconductors, the building blocks for most advanced industrial and military technologies. It's insulting to those countries for Trump to say, as he did, that it was 'a great honour' for him to send their leaders letters threatening them with punitive tariffs unless they bend to his will or to say that the letters demonstrate 'the strength and commitment of our Trading Relationships.' He's invited those countries, among America's closest trade and security partners, to 'participate in the extraordinary Economy of the United States, the Number One Market in the World, by far.' They could be forgiven for thinking that they already do. Loading Yes, they, like the other countries being targeted with the so-called reciprocal tariffs – Thailand (36 per cent rate), Indonesia (32 per cent), Malaysia (25 per ent) and South Africa (30 per cent) were among the others – have trade surpluses with the US, which in Trump's mind means they are ripping the US off via unfair trade practices. The view of most non-MAGA trade economists, however, is that the $US1.2 trillion US trade deficit in goods has more to do with Americans spending more than they produce – living beyond their means – than it does with unfair trade practices. In the letters, Trump described the deficits as 'unsustainable' and a major threat to the US economy and national security. The reality is that America's last trade surplus was in 1975, so for half a century America has sustained, and generally prospered despite those trade deficits without them threatening its national security. Trump's tariffs will raise the prices for imported goods for consumers, input costs for its manufacturers and disrupt its companies supply chains. Those effects will occur in the near term. Trump keeps asserting that the countries subjected to the tariffs will pay them but it is America and Americans that will have to absorb the cost of raising the duties paid by its importers from less than the 2.5 per cent effective average rate before Trump embarked on his trade war to something, once the reciprocal and sectoral tariffs are factored in, that could be well above 20 per cent. While the objective of the tariff policy is ostensibly to coerce foreign companies into investing in domestic manufacturing within the US, even if that were successful (and any success is likely to be relatively modest) it would take years for new plants to be constructed and skilled workforces to be assembled and, almost by definition, the costs of the end products would be higher than those of the imports they displace. The more likely 'success' the policy might have in reducing the US trade deficit is if it ignites stagflation – reduced economic growth but increased inflation – and a recession that pulls US living standards and consumption and the demand for imported goods down. Trade wars are mutually destructive, with everyone losing. In America's case, the damage will be self-inflicted. Trump's obsession with Tariffs also betrays a misunderstanding of the nature of today's US economy. He's fixated on the trade deficit in goods, but the US economy is services-based. More than 75 per cent of US GDP is generated by the services sector; less than 25 per cent by goods-producing sectors. America has a trade surplus in services. In the letters, Trump warns that goods that are transhipped – goods that originate in a third country, which means China – will face an even higher tariff. That was a feature of last week's deal, or at least the framework of a deal, the US announced it has reached with Vietnam, where the 'reciprocal' rate of 20 per cent would be doubled for transhipped goods. He also threatened that, should the countries raise their own tariffs in response to US tariffs, that rate would be added to the rate the US charges. Japan and South Korea stand out within the list of countries that were sent the Trump letters, most of which are smaller and have smaller trade volumes with the US. The size and nature of their economies and their strategic relationships with the US and its other allies have, over decades, classified them as among America's friends. With 'friends' like this, America's 'enemies' – China and, potentially, the BRICs grouping of developing economies that includes China and Russia – would be excited by the prospect of America's self-induced isolation.
Yahoo
03-07-2025
- Business
- Yahoo
Why are people calling Trump TACO, what is the Trump Collar? Here's what it all means
President Donald Trump's trade war tactics have earned him a new nickname "TACO". The new acronym is gaining popularity among Wall Street investors, much to the president's disdain. Here's what to know about "TACO," tariff negotiations and the "Trump Collar." The term TACO, which stands for "Trump Always Chickens Out.' First coined by Financial Times commentator Robert Armstrong to describe what he says is Trump's pattern of announcing heavy tariffs on countries causing economic shock, panic and stock market hits and then later reversing course with pauses or reductions that create a market rebound. When asked about TACO on Wednesday by a reporter, Trump responded, 'I chicken out? Oh, I've never heard that. You mean because I reduced China from 145% that I set down to 100... and then to another number?' He went on to defend his decisions to slash his tariffs on China for the next 90 days and extend his deadline for a 50% tariff on goods from the European Union until July 9. Trump said "because I gave the European Union a 50% tax tariff, and they called up and they said 'please lets meet right now, please let's meet right now,' and I said OK, I'll give you until July." He then clarified that they weren't willing to meet initially, "And after I did what I did, they said, 'we'll meet anytime you want.' You call that chickening out?" "Six months ago, this country was stone cold dead. We had a dead country. We had a country that people didn't think it was going to survive," Trump said. "And you ask a nasty question like that. It's called negotiation." "Don't ever say what you said because that's a nasty question," Trump said. After the reporter's TACO question and Trump's heated response, taco and chicken related memes went viral, including an old Cinco de Mayo tweet by the President himself. As "TACO" Trump gained popularity, Nomura's strategist Charlie McElligott came up with "Trump Collar" in the same vein. In finance, a collar is a risk management strategy for stock owners that protects from big losses but also limits gains — creating a range within which the stock's price can fluctuate without significant profit or loss. McElligott likened the collar term to how the stock market reacts to Trump. It may want to go up, but Trump's random social media posts and trade-tariff remarks can make the market nervous and therefor volatile. 'You all know 'Art of the Deal' Trump … and over the past month+, the 'TACO'-kind … but what it all adds up to now is the de facto 'Trump Collar,' as the market retrains the reaction function in the 'Human VVIX' era,' said McElligott according to MarketWatch. This article originally appeared on Why is Trump called TACO and what does Trump collar mean? What we know Sign in to access your portfolio
Yahoo
30-06-2025
- Politics
- Yahoo
Sen. John Cornyn looks to overcome Paxton primary challenge by embracing Trump
WASHINGTON — Over his 22 years in Congress, U.S. Sen. John Cornyn has amassed untold power within the Republican Party, serving on high-ranking committees and ascending his party's leadership ranks. But the Republican base that sent Cornyn to the Senate in 2002 has transformed. GOP voters have turned to the right, prizing partisan fighters like President Donald Trump and championing culture war issues over the traditional pillars of fiscal prudence and small government. Out of that movement has come Cornyn's 2026 primary challenger, Texas Attorney General Ken Paxton, who is harnessing his reputation as a no-holds-barred conservative to position himself as the president's warrior from outside the Washington beltway in which Cornyn has been ingrained. With Cornyn's establishment ties putting his reelection bid in jeopardy, Texas' senior senator is going all in on emphasizing his support for Trump — something he has been previously wary to do — to court the MAGA base that will be key to winning next year's primary. Over the past several months, Cornyn has played up his conservative bona fides and allegiance to Trump's agenda through the bully pulpit of his office, issuing public declarations, holding hearings and embracing the president's favorite issues — even posting a photo of himself reading Trump's 'Art of the Deal' book. Those efforts appear aimed at combating the perception among some GOP voters that Cornyn is not conservative enough and has spent too long in Washington, fueled by his role in passing the first gun safety bill in a generation and his ties to Senate GOP leadership. His close ally, former Senate GOP Leader Mitch McConnell, has vocally opposed Trump at several turns, making him a pariah among some on the right. During Trump's first term, Cornyn served as the Senate whip, McConnell's second-in-command tasked with counting votes and arm-twisting senators into backing the party's agenda. He parlayed that role into a failed bid to succeed McConnell, further underscoring his establishment ties to skeptics. The narrative that Cornyn is out of step with Trump is being challenged by his campaign and the National Republican Senatorial Committee, the campaign wing of the Senate GOP. Nick Puglia, a spokesperson for the NRSC, said the group is throwing its weight — which includes a multimillion-dollar war chest — behind Cornyn, highlighting his alliance with Trump 'to deliver big wins for Texans and fight for the president's agenda in the U.S. Senate.' Cornyn, meanwhile, has marched in lockstep with the president. His team has hired operatives from Trump's orbit, including the president's former campaign pollster Tony Fabrizio and adviser Chris LaCivita. And he has voted to confirm all of Trump's cabinet nominees, including several controversial picks opposed by some of his Republican colleagues, like McConnell. The senior Texas senator has also made efforts to praise Trump at nearly every turn. When the president was considering strikes against Iran earlier this month, Cornyn took a measured tone. He called the possible use of U.S. munitions 'a continuation of the current policy' toward Israel but emphasized that the American military did not need 'to take the lead in this effort.' After Trump ordered a strike on three Iranian nuclear facilities, Cornyn praised the commander-in-chief, saying he 'made the courageous and correct decision to eliminate the Iranian nuclear threat' and called Trump 'indomitable.' As Trump's 100th day in office approached, Cornyn wrote an op-ed boasting that he was working 'hand-in-glove' to implement the party leader's agenda in Washington. The senator has also taken up some of Trump's pet issues. In March, Trump first questioned the validity of pardons issued by former President Joe Biden due to his alleged use of an autopen to sign the documents — a tool used by presidents dating back to Barack Obama. Pairing claims of mental decline with the pen, Trump alleged that Biden was unaware of documents being signed in his name, so they were 'null and void.' Biden has denied the allegations. Cornyn has since capitalized on the issue, wielding his senatorial powers to hold a recent hearing into the allegations and sending a May letter to the U.S. Department of Justice asking the attorney general to launch a probe into the matter. Two weeks later, Pardon Attorney Ed Martin opened an investigation, according to a senior administration official who noted that Martin was acting independently of the White House. Courting Trump's support has become routine in a Republican Party whose leaders have displayed remarkable deference to the president and his whims, given the sway he holds over the GOP base. But gladhanding Trump is something Cornyn has vacillated on. He started out as a Trump skeptic in 2016, calling him an 'albatross around the down-ballot races' before eventually backing him. When Trump first tried to emerge from political exile in hopes of being re-elected in 2024, Cornyn was wary, saying Trump's 'time has passed him by.' He again changed his tune once Trump won the New Hampshire primary, going public with an endorsement. Despite his past skepticism, Cornyn seems to recognize just how much sway Trump has over this election, with his coveted endorsement carrying the potential to bolster Cornyn's conservative cred — or compound his uphill climb if Trump backs Paxton. Matt Mackowiak, a senior adviser on Cornyn's campaign, said Cornyn 'has been a strong supporter of President Trump, and that's really not up for debate.' He highlighted the senator's time serving as the GOP's Senate whip, during which he wrangled his colleagues' votes to push through landmark legislative achievements during Trump's first term, including tax cuts and confirmation of Supreme Court nominees. Cornyn has been in touch with the president directly, Mackowiak said, to pitch 'our plan to win the primary and the enormous cost and political risk if Paxton is the nominee.' Paxton's team has also been privately lobbying Trump's circle for the president's backing, according to a senior staffer with the Paxton campaign who was granted anonymity to discuss internal deliberations. Cornyn's efforts to align himself with Trump have yet to strengthen his record in the eyes of primary voters as he trails Paxton in a two-way hypothetical primary by more than 15 points in multiple polls. Brendan Steinhauser, a GOP strategist who ran Cornyn's successful 2014 reelection, said he views the senator's recent positions as an authentic reflection of his conservative ideology. But Steinhauser added that he's 'not going to pretend like the primary has nothing to do with all this,' noting that the tough race has forced Cornyn to message a little differently by 'highlighting his conservative record.' Mackowiak also insists that Cornyn's recent moves do not mark a change in his views. 'There's a false perception about Cornyn's actual record, and it's part of our job to make sure that people understand what it actually is,' he said. Sam Cooper, a strategist for the Paxton-aligned Lone Star Liberty PAC, thinks voters will see through this strategy. 'I don't think it's lost on anybody that he's picked up a lot more interest in these issues in an election year,' he said. Texas' attorney general has his own baggage to contend with. He was indicted in 2015 on security fraud charges before agreeing to perform community service and pay restitution in exchange for prosecutors dropping the case. The GOP-controlled Texas House also impeached Paxton in 2023, before the state Senate ultimately voted to acquit him. The Associated Press also reported that the DOJ decided not to prosecute Paxton in the waning weeks of Biden's term, effectively closing a federal corruption investigation. Nick Maddux, a Paxton adviser, painted these accusations much as Trump did in the 2024 election: as notches in the attorney general's warrior-like record. 'Everyone's come after him, and he literally won't stop fighting — and he's won every battle,' Maddux said. Cooper drew explicit parallels between Paxton and Trump's alleged wrongdoing, saying, 'just like President Trump, Attorney General Paxton has received his fair share of lawfare, and each and every time he's stood up and won.' Mackowiak said Paxton's legal history is certain to play into Cornyn's campaign messaging, as they are 'not sure' whether the electorate has come to grips with the attorney general's past actions. He also sent a shot across the bow at the Paxton camp, warning that there is more to the attorney general's record than what 'has been out there for voters to see, hear and read.' In this political minefield, many elected Republicans have remained on the sidelines, having found themselves in a lose-lose situation where they would incur the wrath of fellow Republicans no matter who they support. Sen. Ted Cruz has told Dallas' ABC affiliate that he will not endorse in the primary. Rep. Michael McCaul, who served under Cornyn when he was the state's attorney general over two decades ago, declined to say which candidate he was backing. But he criticized the race itself, calling it 'unfortunate.' The Austin Republican's biggest gripe was with the millions of dollars that are certain to pour into the race for both candidates, rather than in states 'where we could pick up seats.' 'We've got a long way to go,' said U.S. Rep. Keith Self of McKinney, who also declined to endorse a candidate. 'Grab your popcorn, and let's see what happens.' Big news: 20 more speakers join the TribFest lineup! New additions include Margaret Spellings, former U.S. secretary of education and CEO of the Bipartisan Policy Center; Michael Curry, former presiding bishop and primate of The Episcopal Church; Beto O'Rourke, former U.S. Representative, D-El Paso; Joe Lonsdale, entrepreneur, founder and managing partner at 8VC; and Katie Phang, journalist and trial lawyer. Get tickets. TribFest 2025 is presented by JPMorganChase.
