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Japan Today
09-07-2025
- Business
- Japan Today
Trump's trade blitz produces few deals but lots of uncertainty
By PAUL WISEMAN President Donald Trump and his advisers promised a lightning round of global trade negotiations with dozens of countries back in April. White House trade adviser Peter Navarro predicted '90 deals in 90 days.'' Administration officials declared that other countries were desperate to make concessions to avoid the massive import taxes – tariffs -- that Trump was threatening to plaster on their products starting July 9. But the 90 days have come and gone. And the tally of trade deals stands at two – one with the United Kingdom and one with Vietnam. Trump has also announced the framework for a deal with China, the details of which remain fuzzy. Trump has now extended the deadline for negotiations to Aug. 1 and tinkered with his threatened tariffs, leaving the global trading system pretty much where it stood three months ago — in a state of limbo as businesses delay decisions on investments, contracts and hiring because they don't know what the rules will be. 'It's a rerun, basically,'' said William Reinsch, a former U.S. trade official who's now an adviser with the Center for Strategic and International Studies think tank. Trump and his team 'don't have the deals they want. So they're piling on the threats." The pattern has repeated itself enough times to earn Trump the label TACO — an acronym coined by The Financial Times' Robert Armstrong that stands for 'Trump Always Chickens Out.' "This is classic Trump: Threaten, threaten more, but then extend the deadline,' Reinsch said. 'July 30 arrives, does he do it again if he still doesn't have the deals?'' (Trump said Tuesday that there will be no more extensions.) The deal drought represents a collision with reality. Negotiating simultaneously with every country on earth was always an impossible task, as Trump himself belatedly admitted last month in an interview with the Fox News Channel. ('There's 200 countries,'' the president said. 'You can't talk to all of them.'') And many trading partners — such as Japan and the European Union — were always likely to balk at Trump's demands, at least without getting something in return. 'It's really, really hard to negotiate trade agreements,' which usually takes several months even when it involves just one country or a small regional group, said Chad Bown, an economic adviser in the Obama White House and now senior fellow at the Peterson Institute for International Economics. 'What the administration is doing is negotiating a bunch of these at the same time.'' The drama began April 2 – "Liberation Day,'' Trump called it — when the tariff-loving president announced a so-called baseline 10% import tax on everybody and what he called 'reciprocal'' levies of up to 50% on countries with which the United States runs trade deficits. The 10% baseline tariffs appear to be here to stay. Trump needs them to raise money to patch the hole his massive tax-cut bill is blasting into the federal budget deficit. By themselves, the baseline tariffs represent a massive shift in American trade policy: Tariffs averaged around 2.5% when Trump returned to the White House and were even lower before he started raising them in his first term. But the reciprocal tariffs are an even bigger deal. In announcing them, Trump effectively blew up the rules governing world trade. For decades, the United States and most other countries abided by tariff rates set through a series of complex negotiations known as the Uruguay round. Countries could set their own tariffs – but under the 'most favored nation'' approach, they couldn't charge one country more than they charged another. Now Trump is setting the tariff rates himself, creating 'tailor-made trade plans for each and every country on this planet,'' in the words of White House press secretary Karoline Leavitt. But investors have recoiled at the audacious plan, fearing that it will disrupt trade and damage the world economy. Trump's Liberation Day tariffs, for instance, set off a four-day rout in global financial markets. Trump blinked. Less than 13 hours after the reciprocal tariffs took effect April 9, he abruptly suspended them for 90 days, giving countries time to negotiate with his trade team. Despite the Trump administration's expressions of confidence, the talks turned into a slog. 'Countries have their own politics, their own domestic politics,' Reinsch said. 'Trump structured this ideally so that all the concessions are made by the other guys and the only U.S. concession is: We don't impose the tariffs.'' But countries like South Korea and Japan needed 'to come back with something,'' he said. Their thinking: 'We have to get some concessions out of the United States to make it look like this is a win-win agreement and not a we-fold-and-surrender agreement. ' Japan, for example, wanted relief from another Trump tariff — 50% levies on steel and aluminum. Countries may also be hesitant to reach a deal with the United States while the Trump administration conducts investigations that might result in new tariffs on a range of products, including pharmaceuticals and semiconductors. Frustrated by the lack of progress, Trump on Monday sent letters to Japan, South Korea and 12 other countries, saying he'd hit them with tariffs Aug. 1 if they couldn't reach an agreement. The levies were close to what he'd announced on April 2; Japan's, for example, would be 25%, compared to the 24% unveiled April 2. Trump did sign an agreement last month with the United Kingdom that, among other provisions, reduced U.S. tariffs on British automotive and aerospace products while opening the U.K. market for American beef and ethanol. But the pact kept the baseline tariff on British products mostly in place, underlining Trump's commitment to the 10% tax despite the United States running a trade surplus — not a deficit — with the U.K. for 19 straight years, according to the U.S. Commerce Department. On July 2. Trump announced a deal with Vietnam. The Vietnamese agreed to let U.S. products into the country duty free while accepting a 20% tax on their exports to the United States, Trump said, though details of the agreement have not been released. The lopsided deal with Vietnam suggests that Trump can successfully use the tariff threat to bully concessions out of smaller economies. 'They just can't really negotiate in the same way that the (European Union) or Korea or Japan (or) Canada can negotiate with the United States,'' said Dan McCarthy, principal in McCarthy Consulting and a former official with the Office of the U.S. Trade Representative in the Biden administration. 'A lot of (smaller) countries just want to get out of this and are willing to cut their losses.'' But wrangling a deal with bigger trading partners is likely to remain tougher. 'The U.S. is gambling that these countries will ultimately be intimidated and fold,' Reinsch said. 'And the countries are gambling that the longer this stretches out, and the longer it goes without Trump producing any more deals, the more desperate he gets; and he lowers his standards. "It's kind of a giant game of chicken.'' © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Japan Today
01-07-2025
- Business
- Japan Today
U.S. job openings in May hit 7.8 million in a continuing display of labor market resilience
By PAUL WISEMAN U.S. job openings rose unexpectedly in May, a sign that the American labor market remains resilien t in the face of high borrowing costs and uncertainty over U.S. economic policy. U.S. employers posted 7.8 million vacancies in May, the Labor Department reported Tuesday, up from 7.4 million in April and the highest November's 8 million, when former President Joe Biden was still in the White House. Economists had expected a slight decrease to 7.3 million. Openings were reported at hotels and restaurants and at finance companies. Vacancies at the federal government fell to the lowest level since May 2020, likely reflecting President Donald Trump's hiring freeze. The Labor Department's Job Openings and Labor Turnover Survey (JOLTS) report showed that the number of Americans quitting their job — a sign of confidence in their prospects — rose modestly, and layoffs fell. However, the report showed that hiring fell in May, suggesting that employers, though reluctant to lose staff, are hesitant about adding workers amid uncertainty over the economy. 'Hiring remains depressed, but that is less worrisome than it would be otherwise because layoffs continue to be low,' Nancy Vanden Houten, lead U.S. economist at Oxford Economics, wrote in a commentary. Openings are high by historical standards but have come down sharply since peaking at a record 12.1 million in March 2022. The U.S. job market has steadily decelerated from hiring boom of 2021-2023 when the economy bounced back from COVID-19 lockdowns. The unexpectedly strong post-pandemic recovery ignited inflation, prompting the Federal Reserve to raise its benchmark interest rate 11 times in 2022 and 2023. The higher borrowing costs have gradually cooled the labor market, and President Donald Trump's policy of taxing imports at high rates has added uncertainty to the hiring outlook. The Labor Department is expected to report Thursday that the U.S. economy generated 117,000 jobs last month, according to a survey of forecasters by the data firm FactSet. That would be down from 139,000 in May, from an average 168,000 a month in 2024 and a from a monthly average of 400,000 from 2021 through 2023. The unemployment rate is forecast to tick up to a still-low 4.3% from 4.2% in May. © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Japan Today
03-06-2025
- Business
- Japan Today
U.S. job openings rise in April
By PAUL WISEMAN U.S. job openings rose unexpectedly in April, showing that the labor market remains resilient in the face of uncertainty arising from President Donald Trump's trade wars. The Labor Department reported Tuesday that employers posted 7.4 million job vacancies in April, up from 7.2 million in March. Economists had expected openings to drift down to 7.1 million. But the number of Americans quitting their jobs— a sign of confidence in their prospects — fell, and layoffs ticked higher. And in another sign the job market has cooled from the hiring boom of 2021-2023, the Labor Department reported one job for every unemployed person. As recently as December 2022, there were two vacancies for every jobless American. Openings remain high by historical standards but have dropped sharply since peaking at 12.1 million in March 2022, when the economy was still roaring back COVID-19 lockdowns. The Labor Department's Job Openings and Labor Turnover Summary showed little evidence of cuts to the federal workforce by billionaire Elon Musk's Department of Government Efficiency. Openings for federal jobs rose to 134,000 in April from 121,000 in March. And federal layoffs fell to 4,000 from 8,000 in March and 19,000 in February. Although it has decelerated, the American job market has remained resilient in the face of high interest rates engineered by the Federal Reserve in 2022 and 2023 to fight a resurgence of inflation. The economic outlook is uncertain, largely because of Trump's economic policies — huge taxes on imports, purges of federal workers and the deportation of immigrants working in the United States illegally. Carl Weinberg, chief economist at High Frequency Economics, said the JOLTS report shows that companies are waiting to see how Trump's policies play out. 'Once companies are more certain that bad times are coming, they will start to shed workers,' he wrote in a commentary. 'However, the economy is still near full employment. We suspect companies are still hoarding workers until they are very, very sure about an economic downturn.″ The Labor Department is expected to report Friday that employers added 130,000 jobs last month, down from 177,000 in April. The unemployment rate is expected to stay at a low 4.2%, according to a survey of forecasters by the data firm FactSet. © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Japan Today
21-05-2025
- Business
- Japan Today
Saying Trump exceeded his authority, 12 states ask court to strike down his sweeping tariffs
By PAUL WISEMAN Twelve states on Wednesday urged a federal court to strike down President Donald Trump's sweeping taxes on imports, saying he had exceeded his authority, left U.S. trade policy dependent on his whims and unleashed economic chaos. They are challenging tariffs that Trump imposed last month on most of the countries in the world in an effort to reverse America's massive and longstanding trade deficits. They are also targeting levies the president had earlier plastered on imports from Canada, China and Mexico to combat the illegal flow of immigrants and the synthetic opioids across the U.S. border. A three-judge panel of the U.S. Court of International Trade in New York on Wednesday heard arguments in the states' case. Last week, the trade court held a hearing in a similar challenge to Trump's tariffs brought by five small businesses. The court specifically deals with civil lawsuits involving international trade. Its decisions can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington and ultimately to the Supreme Court, where the legal challenges to Trump' tariffs are widely expected to end up. At least seven lawsuits are challenging the levies, the centerpiece of Trump's trade policy. Declaring that the United States' trade deficits add up to a national emergency, Trump invoked the 1977 International Emergency Economic Powers Act (IEPPA) and rolled out 10% tariffs on many countries on April 2 — "Liberation Day,'' he called it. He imposed stiffer 'reciprocal'' tariffs of up to 50% on countries that sell more goods to the United States than the U.S. sells them. (Trump later suspended those higher tariffs for 90 days.) The states argue that the emergency economic powers act does not authorize the use of tariffs. Even if it did, they say, the trade deficit does not meet the law's requirement that an emergency be triggered only by an 'unusual and extraordinary threat.'' The U.S. has run a trade deficit with the rest of the world for 49 consecutive years. 'This is not an unusual problem,'' Brian Marshall, an Oregon state attorney, told the judges Wednesday. The Trump administration argues that courts approved President Richard Nixon's emergency use of tariffs in a 1971 economic crisis. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the language used in IEPPA. Brett Shumate, the assistant U.S. attorney general representing the administration, argued Wednesday that only Congress, and not the courts, can determine the 'political'' question of whether the president's rationale for declaring an emergency complies with the law. That argument led Judge Jane Restani to ask if courts were helpless to block the president's emergency declarations no matter how 'crazy'' they were. Trump's Liberation Day tariffs shook global financial markets and led many economists to downgrade the outlook for U.S. economic growth. So far, though, the tariffs appear to have had little impact on the world's largest economy. The 12 states pursuing the case are Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon and Vermont. © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
