By Josh Bork
WASHINGTON (AP) — When President Donald Trump last rolled out this top tariff, financial markets tremble, consumer confidence crashed and his popularity plummeted.
Just three months later, he bets that this time will be different.
In his new tariffs announced this week, Trump essentially stitches the global economy together with his instinctive belief that import taxes will bring factory work and stronger growth, rather than the inflation and slowdown that many economists expect.
On Tuesday, he told the Cabinet that past presidents who had not actively deployed tariffs were “silly.” The salesman added that it was “too long” for Trump to try to negotiate trade deals with other parts of the world, so it was easier to send letters to them, as they list tariff rates for their products, as they do this week.
The letter marked a change from his self-proclaimed “liberation day” event at the White House. There he had a poster board showing the rates. Instead, Trump chose to submit form letters with random capitalization and punctuation and other formatting issues.
“That’s a better way,” Trump said of his letter. “It’s a more powerful way. And we send letters to them. You’re reading letters. I think it was well made. And it’s pretty much a bit of a number out there: you pay 25%, 35%.
He levied taxes in Laos and Myanmar on Monday as Trump said these words, as he had not yet issued a letter with a tariff rate above 40%. He plans to put a 25% tariff on Japan and South Korea. This is two major trading partners and allies that appear to be important to curb China’s economic impact. So far, leaders from 14 countries have been in charge of tariffs and hope to negotiate over the next three weeks before higher fees are charged for imports.
“I think it’s all the cases where they treat them better than they’ve been treating us over the years,” Trump said.
Three possible outcomes
His approach contradicts how major trade agreements have been created in detailed sessions over the past half century, and it can take years to resolve complex differences between nations.
This political and economic bet has three consequences, each of which could significantly reshape international issues and Trump’s legacy.
Trump can prove that most economic experts are wrong, and tariffs can bring growth as promised. Or, he was able to retreat again at tariffs before August 1 began with a recurring repetition of the “Trump Always Chicken” phenomenon, also known as tacos. Or he could damage the economy in ways that could allow a boomerang to the community that would help him return to the White House last year, or tariffs could hurt a country that is at an economic disadvantage.
Sen. Ron Wyden said Trump’s letter “extended his tariff purgatory to the month.”
“The TACO negotiation tactics pioneered by Trump have made his threat even more unreliable and less willing to meet in the middle of our trading partners,” Wyden said. “There is no indication that he is actually close to a durable trade deal that supports American workers and businesses.”
So far, the inventory and bond markets have been relatively mild, with the S&P 500 stock index being essentially flat after Monday’s decline. Trump has won a legislative victory with his income cut of a few dollars. And he doesn’t accelerate as many economists and democratic rivals have warned, but he is confidently collecting tariffs at levels previously shaking global markets, supported by the fact that inflation has been eased so far.
“With increasing tariffs from 40% to 100%, the administration has “normalized” 25% tariff hikes, which is still one of the most aggressive and destructive tariff moves in modern history,” said Wendong Chan, an economist at Cornell University. “Paradoxically, this progressive announcement risks normalizing what would otherwise be considered a very large tariff hike.”
Others simply view Trump as a source of nonstop confusion, with letters and its somewhat random tariff rates indicating that there is no real policy process within his administration.
“The fact that this policy is everywhere, that they’re doing this in their pants seating, that there’s no real strategy is actually just a testimony,” said Desmond Lachman, a senior fellow at the American Enterprise Institute, a right-leaning think tank.
Questions about how much taxes generate
With Trump’s 90-day tariff negotiations coming to an end, he has so far sent letters to 14 countries that have taxed imports in the 25% to 40% range. He said he would sign an order to place a 50% tariff on copper on Tuesday, and at a cabinet meeting said at one point that drugs could face 200% tariffs. All of these are above the existing 50% tariffs on steel and aluminum, the 25% tariffs on automobiles, and his individual import taxes in Canada, Mexico and China.
“The obvious reasoning is that for now the market is somewhat skeptical of Trump to think he will experience it or reach a compromise,” said Ben May, director of Global Economy Research at consultant Oxford Economics. “That’s probably the key.”
In May, tariffs likely reduce the growth of household incomes in the United States, but those incomes will not be reduced completely.
Trump said his tariffs would close US trade imbalances, but it is unclear why he would target countries such as Tunisia that have relatively little trade with the US. Executives say trillions of tariff revenue over the next decade will help offset losses in revenue from continuing and expanding tax cuts in 2017, signed Friday.
The federal government has so far collected $98.2 billion in tariff revenue this year, more than double what it collected last year, according to the Center for Bipartisan Policy.
At a cabinet meeting Tuesday, Treasury Secretary Scott Bescent said tariff revenue could “better than $300 billion by the end of the year.” Bessent adds that he “disagrees” with the Congressional Budget Office, and estimates tariffs will bring in $2.8 trillion over a decade.
Governments in Japan, South Korea, Malaysia, Myanmar, Thailand, Cambodia and South Africa have said they want further negotiations on tariffs with Trump, but it is unclear how that is possible, as Trump says it is “too complicated” to hold all of those meetings.
Instead, on Tuesday, Trump posted on social media that tariffs would be charged from August 1st.
“There will be no change in this date, and there will be no change,” Trump said in The Truth Society. “Extensions are not allowed. Thank you for keeping an eye on this issue.”
Original issue: July 8, 2025, 6:51pm EDT
