Donald Trump's 1 August tariff deadline achieved its intended effect of keeping markets and nations guessing, according to an analysis that highlights the political and economic dangers of the US trade policy. Last-minute agreements were struck this week, though few were considered fair or rational in trade terms, while court challenges disputed the president's authority to wage a trade war.
The analysis suggests that Trump's tariffs are driven more by political clout than economic power, citing his antipathy towards the European Union. A pact agreed by European Commission President Ursula von der Leyen in Scotland underlined that the EU's global economic aspirations exceed its actual influence, as it could not prevent US tariffs on European goods or secure the removal of EU tariffs on US products.
In contrast, China has responded aggressively to Trump's tariff threats, imposing retaliatory tariffs and blocking sales of rare-earth minerals. The standoff has not produced a deal, and the Friday deadline has been reset for later in the month, with further delays possible.
The analysis also notes that Trump is using tariff powers delegated by Congress to raise government income without oversight and to shift the tax burden away from the wealthy. International talks have been influenced by political grievances, including disputes with Brazil over Jair Bolsonaro's prosecution, India over Russian energy purchases, and Canada over Palestinian recognition.
Ultimately, the economic test will be decisive. If tariffs raise prices on US high streets, slow growth, and fuel inflation, market sentiment could shift, potentially affecting voter mood.
