US Politics
Trump’s tariff day is here but if TACO’s on the menu, the charade is over
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Donald Trump’s tariff deadline is here, and now, the bill is due — and Trump has a choice before him: enforce the levies against the nation’s trading partners or TACO (Trump Always Chickens Out).
The president said in July that the end of his 90-day pause would be marked by a month of last-minute dealmaking, as countries attempted to get agreements in place before the resumption of tariff enforcement on Aug. 1.
As Wednesday morning dawned in DC, the president seemingly indicated that his days of “pauses” were over. In a Truth Social post, Trump declared: “THE AUGUST FIRST DEADLINE IS THE AUGUST FIRST DEADLINE — IT STANDS STRONG, AND WILL NOT BE EXTENDED.”
Yet, at the same time, he undermined that message.
A separate announcement from his Truth account declared progress in talks with Claudia Sheinbaum, president of Mexico. Greasing the wheels for those talks, Trump said, would be what he just said wouldn’t happen: a tariff pause (sort of). The president wrote (in lowercase this time) that tariffs with Mexico would continue at current rates for another 90 days.
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“The complexities of a Deal with Mexico are somewhat different than other Nations because of both the problems, and assets, of the Border,” Trump offered as explanation.
So where does that leave American businesses, and the White House itself as it pertains to Trump’s credibility on trade issues? Some experts were flummoxed on how businesses should plan for the future after enforcement begins on Friday.
They pointed to the president’s preference for informal trade agreements, which many argue do not constitute real agreements at all, to wit:
— The White House has not released specific details or produced written agreements to back up many of the president’s claims.
— Because they did not receive congressional approval, there’s no formal enforcement measures.
— And Trump’s own proclamations often differ from those of his foreign negotiating partners.
David Townsend, a trade-focused litigator with Dorsey & Whitney, also noted the lack of details governing rules of origin for imported products.
“There could be different rules of origin for different products, or across the different trade agreements. From an investment and trade standpoint, it is very difficult to tell how these rules of origin will operate, what the impact will be on investments, and to particular industries. Companies will need to wait until the details are released of how the particular agreements will operate,” he told The Independent.
“In short, it is not possible to predict how these trade agreements will work in practice, how certain businesses will be impacted by them, and what kind of import compliance challenges will arise under the new agreements,” Townsend said.
CNN’s Richard Quest summed up his own feelings: “I stand by my comment that the trade deals being announced are largely garbage because they are so uncertain with no mechanisms for enforcement or even any idea of how to make them happen.”
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The uncertainty around what the trade landscape will look like come Monday could be the reason why the Dow Jones Industrial Average stalled this week and didn’t seem to react upon news of Trump’s tariff extension with Mexico.
But experts across the board agree that it seems as if Trump’s reciprocal tariffs are now here to stay in some fashion — the only question remaining is how high they will go.
Trade groups representing industries targeted by individual tariff rates continue to push for zero-to-zero tariff rates, but those seem out of reach after the announcements of recent handshake-deals with the EU and UK.
With those new tariff rates, it’s also a certainty that consumers will continue to feel the price hikes that American retailers began exhibiting over the summer, only to a higher degree. The bill is finally coming due.
Gemma Thompson, a senior consultant with a firm specializing on supply-chain logisitics, explained: “For EU exporters, the challenge now is how to absorb or pass on the additional cost. Where margins are tighter, we’re likely to see knock-on effects to US consumers.”
Given the murkiness around enforcement measures and the unequal “reciprocal rates,” Thompson noted, US importers will also likely explore routing goods through lower-tariff countries acting as middlemen.
With Trump putting his foot down on Thursday, it’s clear that the coverage of Wall Street’s derisive “TACO” nickname irked the president, or at the very least drove home the notion that he risked his credibility crossing further self-drawn red lines.
But what remains to be seen is how much damage was already done by the president’s 90-day pause and the general campaign to keep his supporters on his side Trump has launched since January.
Amid a firestorm around Jeffrey Epstein and after the exhausting marathon fight to pass the “big, beautiful” budget reconciliation package, many businesses and even some trading partners around the world could be gambling that the US president is running low on political capital. A sudden downturn in the markets or painful consumer price hikes could be more than the president can handle, in the view of his critics.