Associated Press, by Josh Boak
WASHINGTON (AP) — President Donald Trump began impose high import taxes on dozens of countries on Thursday, just as the economic fallout of the threat of tariffs for months began to cause visible damage to the US economy.
Since midnight, goods from over 60 countries and the European Union have been subject to tariff rates of over 10%. EU, Japanese and Korean products are taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh amount to 20%. Trump also hopes that the EU, Japan and South Korea will invest hundreds of millions of dollars in the US.
“I think growth will be unprecedented,” Trump said Wednesday. He said the US is “incidenting hundreds of billions of dollars in tariffs,” but did not provide a specific figure of revenue because “we don’t even know what the final number is” in terms of fees.
Despite the uncertainty, the White House is confident that his tariffs will become clear about the world’s biggest economic path. As businesses understand the direction the US is heading, the Republican administration believes they can start hiring in a way that will increase new investments and recalibrate America as manufacturing power.
But so far, there are signs of self-harm in the United States as businesses and consumers support the impact of the new tax.
Risks of economic erosion
According to John Silvia, CEO of Dynamic Economic Strategy, employment began to stall, inflation pressures rose, and housing values in key markets began to decline.
“A low-productivity economy requires fewer workers,” Sylvia said. “But the higher the tariff prices, the lower the real wages of workers. The economy is less productive and businesses cannot pay the same real wages as before. There are consequences for actions.”
Many economists say the risk is a steady erosion of the US economy.
“We’ve been working hard to get into the world,” said Brad Jensen, a professor at Georgetown University.
Trump has promoted tariffs as a way to reduce America’s sustained trade deficit. However, importers tried to avoid taxes by bringing in more goods before customs duties came into effect. As a result, the $582.7 billion trade imbalance in the first half was 38% higher than in 2024. Total construction spending has declined by 2.9% over the past year.
Economic pain is not limited to the US
Germany, which sends 10% of its exports to the US market, found industrial production to be 1.9% in June as Trump’s previous tariffs took hold. “The new tariffs clearly look at economic growth,” said Carsten Brzeski, global chief of ING Bank’s macros.
Disappointing in India and Switzerland
The lead to Thursday fits the nature of Trump’s tariff slap dashes. Trump’s tariffs were unfolded, returned, delayed, increased, imposed by letters and renegotiated.
Trump announced on Wednesday that an additional 25% tariffs will be imposed on India due to Russian oil purchases, raising the total import tax to 50%.
A large group of Indian exporters said it would affect nearly 55% of the country’s outbound cargo to the US, forcing exporters to lose long-standing clients.
“Absorbing this sudden cost escalation is simply not feasible. The margins are already thinning,” said SC Lalhan, president of the Indian Federation of Export Machines, in a statement.
The Federal Council, the Swiss administrative arm, was expected to meet on Thursday after President Karin Keller Sutter and other Swiss officials returned from a trip to Washington in a hurry with a failed bid to avoid a 39% US tariff on Swiss goods.
Import taxes are still on drug drugs, and Trump has announced a 100% tariff on computer chips. It could leave the US economy in a halted animation location as it awaits its impact.
The stock market remains strong
It is under legal challenge for the President to use the law of 1977 to declare an economic emergency to impose tariffs. Even those who worked with Trump during his first term are skeptical, including Wisconsin Republican Paul Ryan, who was the House Speaker.
“There is no reason for this any other reason other than the president who wants to raise tariffs based on his whim,” Ryan told CNBC on Wednesday.
Trump is aware of the risk that the court could overturn his tariffs. In a true social tweet, he said, “The only thing that can stop America’s greatness is the radical left court that wants to see our country fail!”
The stock market has been strong during the tariff drama, with the S&P 500 index climbing more than 25% from its low in April. Market rebounds and the reduction in income taxes signed by Trump’s Tax and Expenditure Measures Act on July 4th have given the White House confidence that economic growth is expected to accelerate in the coming months.
Global financial markets have taken bold new tariffs with mostly high stocks in Asia and Europe and US futures.
But ING’s Brzeski said, “While financial markets appear paralyzed with the announcement of tariffs, don’t forget that the negative economic impacts will gradually unfold over time.”
Trump foresees an economic boom. American voters and other parts of the world are nervously waiting.
“There’s one person who can afford to be a cavalier about the uncertainty he’s creating: Donald Trump,” said Rachel West, a senior Century Foundation fellow who worked for the Biden White House on Labor Policy. “The rest of the Americans are already paying for that uncertainty.”
Original issue: August 7, 2025, 7:23am EDT
