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      The one thing Donald Trump isn’t saying about tariffs

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      Donald Trump’s words and actions rarely align perfectly. If you watch carefully, what he doesn’t say can be just as telling as what he does.“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods,” he told the nation ahead of his re-election. The US president declared on 2 April would “forever be remembered as the day American industry was reborn”, only to pause tariffs a week later.He promised peace in Ukraine on day one of his presidency, only to later clarify this was “said in jest”; and has claimed very few people can beat him at golf, only for footage from Scotland to raise questions over just how honest that round might be.As a real estate mogul, reality TV star and political campaigner, Trump learned to bend narrative to his will, even if it meant straying from reality.As president, this often leaves a gap between what he says and what he does. In many cases, the administration’s actions are more important to follow than the firehose of words.If you were, say, a US business buying coffee from Brazil, you might have rushed to import it last week after Trump insisted 1 August was the cast-iron deadline for new tariffs. “It stands strong, and will not be extended,” he wrote on Wednesday – hours before signing an executive order that said new steep tariffs on the country would come into force on 8 August, after all.And if you’re a US consumer, you might reasonably ask how inflation can be “dead”, as the White House has claimed, if you’re still shelling out more on groceries each month.The president has an awful lot to say about tariffs. They will, he argues, raise “trillions” of dollars for the US federal government; eliminate trade deficits with other countries; and even punish Brazil for putting his ally, the former president Jair Bolsonaro, on trial for allegedly seeking to seize power after losing the 2022 presidential election. The list goes on.But what about what the president doesn’t say?Trump was re-elected last November after repeatedly pledging to rapidly bring down prices for Americans. This assurance formed a central pillar of his election campaign – a regular refrain in rallies, interviews and debates – as millions found it harder to make ends meet after years of inflation.Every policy comes at a cost. Every tax must be paid by someone, somewhere. For consumers, The Budget Lab at Yale estimates the short-term price impact of Trump’s tariff changes is equivalent to an average per household income loss of $2,400.What Trump doesn’t really talk about the impact of his aggressive tariff agenda on US is prices. One of the few times he has acknowledged it might actually exacerbate inflation led to a bizarre tangent about dolls back in May. Acknowledging that tariffs might cause price rises, Trump suggested American children might have to settle for having “two dolls instead of 30 dolls”.Back then, Joe Biden was still to blame for any signs of strife in the economy, according to Trump. Now, he argues almost daily Federal Reserve chair Jerome Powell is responsible.The biggest indication yet that the US economy is creaking on Trump’s watch came on Friday, when official data revealed the labor market had stalled this summer. He unceremoniously fired the veteran official in charge of the statistics – and alleged, without evidence, that the numbers had been rigged.With higher US tariffs now in place on a string of countries, the president and his administration will inevitably say a lot about the benefits of his economic strategy. They are already trying to stifle evidence of drawbacks. They might even raise the prospect of a handout – pitched as a sign of this policy’s success, rather than a concession that many Americans are still hard up.But if you’re running a small business reliant on trade, or walking into the grocery store on a budget, reality supersedes rhetoric. Words don’t pay the bills. More

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      Now’s the time for Democrats to hammer Trump on the economy | Lloyd Green

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      “Economic Growth Shatters Expectations as President Trump Fuels America’s Golden Age,” the White House announced on Wednesday. But within 48 hours, the data told a very different story, giving the Democrats a badly needed opening if they can muster the competence and focus to seize upon it.On Thursday, the US commerce department announced that inflation had ticked up to 2.6%. A day later, the labor department reported that unemployment had risen to 4.2% in July, and that the US had actually gained 258,000 fewer jobs than previously reported.From the looks of things, Donald Trump and his tariffs are damaging the economy. Suddenly, things aren’t looking so hot.Rather than copping to a screw-up, however, the president immediately laid blame elsewhere. In a barrage of posts on social media, he lambasted Jerome Powell, the chair of the Federal Reserve, attacked his intelligence and again threatened his tenure at the Fed.The president trashed Powell, who he appointed, as “a stubborn MORON”. Adding insult to injury, Trump brayed: “IF HE CONTINUES TO REFUSE, THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!”But things didn’t end there. The tantrum continued unabated.Hours later, Trump grabbed another page from the strongman playbook and fired Erika McEntarfer, the head of the Bureau of Labor Statistics. He suggested that she had cooked the books and was essentially giving aid and comfort to Joe Biden, the man who first appointed her.As we know, there is reality and then there is Trump’s version of reality.At Friday’s final bell, the Dow had dropped more than 540 points and the Nasdaq was down 2.24%. The ghost of Trump’s so-called “liberation day” had returned to haunt the markets, giving the Democrats ample material to work with.Already, the One Big Beautiful Bill Act places Trump and the Republicans at odds with their base and with swing voters. According to a Wall Street Journal poll, 70% of the US believes the act benefits the rich. Beyond that, the tax plan is underwater with the public, 42-52, and is disfavored by a majority of independents.Practically speaking, the Congressional Budget Office projected in June that nearly 8 million people would lose their insurance under the Trump-backed bill. For the current iteration of the GOP, that’s a problem. These days, Republican voters tilt working class. Many of them break economically liberal and socially conservative.This why House Republicans danced around the issue of coming Medicaid cuts. They stand to harm their own voters. And they know it.Take Mike Lawler, a representative from New York’s Hudson Valley. More than 200,000 of his constituents receive Medicaid benefits. Town halls in his district have become rowdy events, with the police hauling out a constituent.Lawler claims to have “fought extensively to make sure that there were not draconian changes to Medicaid”.“At the end of the day, this is about strengthening the program,” Lawler added. Uh, that’s why he needed the cops.More than 64 Republican House members represent districts where Medicaid rates exceed the national average, according to CNN. In those seats, five incumbents won last November by five points or fewer.But the GOP’s problems don’t end with Medicaid. These days, social security, the most sacrosanct legacy of the New Deal, may be in the crosshairs of Team Trump.On Wednesday, Scott Bessent, the treasury secretary, acknowledged the so-called “Trump accounts” created for kids by the One Big Beautiful Bill Act were actually a “back door for privatizing social security”.The accounts are designed as a vehicle for Americans to build and accumulate wealth as soon as they are born. Under the new law, newborns will be eligible to receive $1,000 from Uncle Sam.“Social security is a defined benefit plan paid out,” Bessent explained. “To the extent that if all of a sudden these accounts grow, and you have in the hundreds of thousands of dollars for your retirement, then that’s a gamechanger.”As a candidate and then again in office, Trump had pledged to leave social security untouched. Now that pledge is in doubt.In 2024, the Republicans made the economic failures of the Biden-Harris administration central to their campaigns. The Trump-Vance campaign raked the Democrats over the coals over inflation. In politics, turnabout is fair play. It is time for the Democrats to show that they actually care about the average voter.

      Lloyd Green is an attorney in New York and served in the US Department of Justice from 1990 to 1992 More

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      Despite Trump, the US economy remains surprisingly resilient. But for how long? | Richard Partington

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      Chaotic and unpredictable, keeping up with Donald Trump’s volatile trade war – never mind his presidency – can be tough.Back in April after his “Liberation Day” tariff announcement, the talk was of the president crashing the global economy. Then, after a Wall Street backlash, the world learned the acronym “Taco”, which stands for “Trump Always Chickens Out”. Now, things are heating up again.The president’s decision to hit US trading partners – including Canada, Brazil, India and Taiwan – with new tariffs after his self-imposed 1 August deadline certainly reignites a threat to the world economy. Dozens of countries have been left reeling, and US consumers are expected to pay a heavy price.However, there is a sense that things could have been worse. Nowhere more clearly is this reflected than on Wall Street: despite the chaos of the president’s trade war, the stock market remains close to record levels.After the latest escalation on Friday, and some worrying US jobs numbers, share prices took a hit, sliding by about 1%. But this is a setback rather than a rout.A further slide could be ignited by this capricious president. Trump’s decision to fire the official in charge of labour market data and his war on the independence of the US Federal Reserve will make matters worse.But despite the warnings of untold economic damage from the US tariff war earlier this year, the American economy has proven surprisingly resilient in recent months.Last week, the president seized on US growth figures showing the economy had expanded at an annualised rate of 3% in the second quarter, far in excess of the 2.4% rate predicted on Wall Street. Could the “fake news” media have it wrong? Are tariff wars “good, and easy to win,” as Trump claims?While inflation has ticked up, from 2.4% in May to 2.7% in June, it is well below the peak that followed the height of the pandemic disruption and Russia’s invasion of Ukraine, and is far from hitting the levels feared.Back in April, in a country wrought with division, Democratic voters reckoned inflation was on track to hit 7.9% within a year, while Republicans said it would collapse to 0.9%.Butthere is good reason why the US economy has so far defied the prophecies of Armageddon. For starters, the hot-cold nature of Trump’s tariff war means investors still anticipate further deals will be done to avoid the worst threats from ever materialising. The toughest tariffs introduced on Friday are only just arriving, too, meaning any impact has yet to emerge.Most countries have not hit back with retaliatory measures, which would have dramatically worsened things by putting international trade into a deeper tailspin.Meanwhile, knowing full well the dangers of this erratic president, businesses have been planning for months to avoid the worst-case scenarios.US companies rushed to stockpile goods before the trade war, helping them to keep prices down for now. Some firms have taken a hit to profits, according to analysts at Deutsche Bank, reckoning this is better than testing struggling American consumers – worn out by years of high inflation – with further price increases.The tariff costs are also being spread by multinationals, by increasing prices across the markets they operate in. In one high-profile example, Sony has put up the price of its PlayStation 5 by as much as 25% in some markets, including the UK, Europe, Australia and New Zealand. But not in the US.Still, there are signs that consequences are coming. When US businesses exhaust their pre-tariff stockpiles, it is likely that prices will creep higher. Meanwhile, the uncertainty of an erratic president is hitting jobs and investment.skip past newsletter promotionafter newsletter promotionLast week’s US jobs market data has reignited fears over the resilience of the American economy. Tariffs are weighing on business confidence and steadily creeping into consumer prices.GDP growth of 3% might appear robust on the face of things, but this figure was heavily influenced by the 0.5% fall in output in the first quarter, when the surge in US firms rushing to beat Trump’s tariffs distorted activity. Growth in the first half averaged 1.25%, markedly slower than the 2.8% rate for 2024 as a whole.Part of the reason Wall Street remains sanguine about this is the continued belief that things could have turned out worse. Deals are still expected, with the pause in tariffs for key US trade partners Mexico and China suggesting this most clearly.The investor view is that rather than tariffs the president would prefer a string of box-office moments in front of the TV cameras with trade partners paying tribute to the court of Trump.However, it would be wrong to underestimate the self-described “tariff man’s” love of border taxes. And even though his most extreme threats will be negotiated down, the final destination will still be much worse than before. An economic hurricane might be avoided but a storm is still the last thing businesses and consumers need.Britain’s US trade deal is a case in point. A 10% US tariff on British goods has been welcomed as a big victory for Keir Starmer given the alternative, but it is still far worse than before.British cars will face a tariff rate four times higher than previously, costing jobs and growth in Britain while hitting American consumers in the pocket.For the US consumer, the average tariff had been close to 2% before Trump’s return to the White House. After his 1 August escalation, that figure leaps to about 15% – the highest level since the 1930s.Almost a century ago a similar wrong-headed protectionist approach in Washington made the Great Depression far worse: the Smoot-Hawley tariffs hit the US and triggered a domino effect among the main industrialised nations, ultimately leading to the second world war.In the unpredictability of Trump’s trade war, hope remains that similar mistakes can be avoided. But significant damage is still being done. More

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      India to still buy oil from Russia despite Trump threats, say officials

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      Indian oil refineries will continue to buy oil from Russia, officials have said, before threatened US sanctions next week against Moscow’s trading partners over the war in Ukraine.Media reports on Friday had suggested India, a big energy importer, would stop buying cheap Russian oil. Trump later told reporters that such a move would be “a good step” if true.“I understand that India is no longer going to be buying oil from Russia,” he said. “That’s what I heard. I don’t know if that’s right or not. That is a good step. We will see what happens.”However, official sources in India, quoted by the news agency ANI, rebutted Trump’s claim, saying Indian oil companies had not paused Russian imports and that supply decisions were based on “price, grade of crude, inventories, logistics and other economic factors”.Trump’s remarks came a day after the White House announced tariffs of 25% on all Indian goods, along with a penalty for buying arms and energy from Russia amid the war in Ukraine.Trump has given an 8 August deadline for Vladimir Putin to stop the war or risk further sanctions on tariffs on countries that import Russian oil.Earlier this week, Reuters reported that Indian state-owned refineries had suspended Russian oil purchases amid the tariff threats and narrowing price discounts.But on Saturday, the New York Times cited two unnamed senior Indian officials who said there had been no change in Indian government policy related to importing Russian oil. One said the government had “not given any direction to oil companies” to cease buying oil from Russia.“These are long-term oil contracts,” one of the sources said. “It is not so simple to just stop buying overnight.”The sources cited by ANI said Indian oil refineries operated in full compliance with international norms, and that Russian oil had never been directly sanctioned by the US or EU. “Instead, it was subjected to a G7-EU price-cap mechanism designed to limit revenue while ensuring global supplies continued to flow.”They added: “India’s purchases have remained fully legitimate and within the framework of international norms.”The sources also noted that if India had not “absorbed discounted Russian crude combined with Opec+ production cuts of 5.8 mb/d [millions of barrels a day], global oil prices could have surged well beyond the March 2022 peak of US$137/bbl [a barrel], intensifying inflationary pressures worldwide”.skip past newsletter promotionafter newsletter promotionRussia is the top oil supplier to India, responsible for about 35% of the country’s supplies. India says that as a major energy importer it must find the cheapest supplies to protect its population against rising costs.On Friday, India’s foreign ministry spokesperson, Randhir Jaiswal, said: “We look at what is available in the markets, what is on offer, and also what is the prevailing global situation or circumstances.”Jaiswal added that India had a “steady and time-tested partnership” with Russia.This partnership has been a point of contention for the White House, with Trump posting on Truth Social on 30 July that while India was “our friend”, it had always bought most of its military equipment from Russia and was “Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE – ALL THINGS NOT GOOD!”In a second post, Trump added: “I don’t care what India does with Russia. They can take their dead economies down together, for all I care.”Ukraine’s military said on Saturday it had hit oil facilities inside Russia, including a refinery in Ryazan, causing a fire on its premises. The strike also hit an oil storage facility, a military airfield for drones and an electronics factory. More

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      Trump’s tariffs face skepticism in court hours before latest round is set to kick in

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      Donald Trump’s global tariffs faced significant skepticism in a federal appeals court on Thursday, as judges investigated whether the president had overstretched his powers just hours before the latest sweeping round of duties is set to kick in.The full 11-strong bench of the US court of appeals for the federal circuit in Washington DC is considering whether Trump exceeded his authority in imposing “reciprocal” tariffs on a large number of US trading partners.Judges repeatedly asked if Trump was justified in relying on emergency powers to effectively tear up the US tariff schedule without consulting Congress.Businesses challenging his strategy accused the White House of engineering a “breathtaking” attempt to force it through, unlike any trade move attempted by a US administration in two centuries.The 1977 International Emergency Economic Powers Act (IEEPA), which Trump has used to invoke emergency powers and enforce many of his tariffs, “doesn’t even say ‘tariffs’”, one of the judges noted. “Doesn’t even mention them.”In May a three-judge panel of the court of international trade blocked the import duties on grounds that Trump’s use of IEEPA was unjustified. The appeals court has stayed that ruling pending the outcome of Thursday’s hearing.“The government uses IEEPA all the time,” said Brett Shumate, assistant attorney general in the justice department’s civil division, representing the administration, to the court. He conceded, however, that it was the first IEEPA had been used to implement tariffs.The US trade deficit – the gap between what it imports to and exports from the world – has “reached a tipping point”, claimed Shumate, enabling Trump to take emergency action. “It’s affecting our military readiness,” he said. “It’s affecting our domestic manufacturing capability.”But Neal Katyal, a lawyer representing businesses challenging the tariffs, argued that Trump was laying a “breathtaking claim to power that no president has asserted in 200 years”.The administration is effectively saying “that our federal courts are powerless; that the president can do whatever he wants, whenever he wants, for as long he wants – so long as he declares an emergency”, Katyal argued.Trump posted about the hearing on his Truth Social platform on Thursday, calling it “America’s big case”. He said: “If our Country was not able to protect itself by using TARIFFS AGAINST TARIFFS, WE WOULD BE ‘DEAD,’ WITH NO CHANCE OF SURVIVAL OR SUCCESS.”“Now the tide has completely turned, and America has successfully countered this onslaught of Tariffs used against it,” the president claimed. “ONE YEAR AGO, AMERICA WAS A DEAD COUNTRY, NOW IT IS THE ‘HOTTEST’ COUNTRY ANYWHERE IN THE WORLD.”The challenge to Trump’s use of emergency powers has been brought by five small businesses acting alongside 12 Democratic-controlled states. They argue that the IEEPA was designed to address “unusual and extraordinary” threats arising in national emergencies, and that the reason for the tariffs do not meet that standard.The small businesses are being represented by a libertarian public interest law firm, the Liberty Justice Center. The non-profit is supported by billionaire rightwing donors including Robert Mercer and Richard Uihlein, who, paradoxically, have also been major backers of Trump’s presidential campaigns. More

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      Canada braces as tariff deadline looms and talks with US ‘chaos machine’ drag

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      After months of tariff threats from the US and escalating trade tensions that have sowed anger in Canada and fractured a once-close alliance, the country is now fast approaching a 1 August deadline to reach a deal with the Trump administration – which has shown no signs of backing down.And observers are keeping a close eye on negotiations this week to determine whether too large a chasm has grown between the countries, resulting in what could be an explosive end to what was decades of free-flowing trade.Canada is also in a highly vulnerable position, as it has closely intertwined its economy with the US’s, and is extremely reliant on a low-barrier trade environment, said William Huggins, an assistant professor in economics at McMaster University in Ontario.“Canada has tried to negotiate sort of forcefully from a position of not acquiescing to every demand, but by the same token, has also realised it’s not in the strongest position to do so … We’ve had to navigate carefully,” said Huggins.The Canadian public is also anxiously awaiting the deadline to strike up a deal. Economists and political scientists say the country’s prime minister, Mark Carney, was elected on the belief that he’s the right person to be at the helm of negotiations and lead Canada through a tenuous period with their southern neighbour.His successes or failures in this arena could affect public perception – as he has characterised his government as being the most adept in the crisis around its sovereignty due to the tariffs and Donald Trump’s persistent claims that he’d like to make Canada the 51st state.“[Carney] is in a situation where he doesn’t hold all the cards and whoever we put in was going to have to figure out a way through this … [His] ability to plan is severely limited by the chaos machine that is operating south of the border,” said Dennis Pilon, the chair of the politics department at York University in Ontario.On Monday, Carney said at a news conference on Prince Edward Island that the trade negotiations are at an “intense pace” and that they are “complex”. But he projected tentative optimism, stating that the negotiations are “tough” because the government is standing up for Canadian interests.“There is a landing zone that’s possible but we have to get there. We’ll see what happens,” he told reporters.But Trump spoke of the negotiations flippantly when asked by reporters outside the White House last Friday. “We haven’t really had a lot of luck with Canada … Canada could be one where there’s just a tariff, not really a negotiation,” he said.So far, much of the talks have happened behind closed doors. There was a glimpse into what could be the dynamic between Carney and Trump when the prime minister had his first meeting with the president in the Oval Office in early May. There were positive tones in both initially offering praise for each other, but the encounter quickly grew tense as Trump repeated his annexation claims, which were subsequently rebuffed by Carney.Since March, Trump has imposed several tariffs on Canadian goods and energy resources. There is a 25% tariff on all goods, excluding potash and energy products. But there’s separately a 10% tariff on energy resources, including potash. Additionally, there’s a further 50% tariff on steel and aluminum imports and a 25% tariff on autos and auto parts.At this stage, the tariffs have seemingly not delivered a significant blow to Canada’s economy, but that could change quickly. The Royal Bank of Canada noted in its June forecast that nearly 90% of Canadian goods are exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA), the free trade deal that replaced Nafta in 2020 and which provides a degree of insulation.In an assessment published by the Toronto-Dominion Bank (TD) on Tuesday, it reported that energy exports have not been significantly affected by the tariffs, as most exports are compliant under the USMCA, and are therefore exempt from tariffs.Some of the insulation so far from tariffs could be from opening Canada up to other markets. TD said that in the past four months, Canadian businesses rapidly moved to reorient supply chains and export to non-US markets. Now about 30% of exports go outside the US – a level not seen since the pandemic, when TD notes there was disorientation in trade.But TD also warned that the negative effects of the tariffs might be beginning to emerge. It said that Canadian exports to the US are “generally underperforming” in tariff-targeted industries, particularly steel and automaking. Canada’s auto exports fell to levels not seen since late 2022, following the April imposition of tariffs. Automakers have also “slashed” production in response, it said.Andrea Lawlor, an associate professor of political science at McMaster University, said that while there haven’t been many layoffs or a complete reorientation of production lines yet, industries targeted by tariffs are preparing to do so.Lawlor also said that Carney has been prudent in his negotiation strategy so far, and right in waiting for deals to be brokered between the US and other nations, as they were this month with Japan and the EU, to help inform Canada’s strategy.skip past newsletter promotionafter newsletter promotionAnd despite concerns about marred relationships with First Nations people, pushing forward controversial infrastructure legislation and his quick scrapping of Canada’s digital services tax – which many, including top former diplomats, viewed as fawning capitulation toward Trump – the prime minister is still enjoying fairly positive polling in his term’s infancy.Abacus Data reported at the end of June that 52% of Canadians surveyed approve of the Carney government. The research firm states it shows that his post-election honeymoon period is “far from over”.Lawlor said the best outcome for Carney in the negotiations is a favourable trade deal – however, there has been signalling from Carney, in his discussion of “tough” talks so far, that Canadians may have to accept a baseline of tariffs.“Many Canadians just simply will not be satisfied if that is the outcome,” she said. But due to Carney facing limited criticism of his interactions with the Americans so far, Lawlor said she believes the prime minister will not face extreme negative blowback if he doesn’t trounce tariffs for good this week.But he will be more vulnerable if the tariffs start to place downward pressure on multiple industries, she said.As Canadians are waiting and watching for the Friday deal deadline, the real fears are around the cementing of a new world order and whether long-term business and consumer decisions need to be made in response, said Preetika Joshi, an assistant professor at McGill University in Quebec that specialises in taxation.“If you were a business owner and you knew Trump is going to be in power for only three, four years, would you necessarily make big, significant changes in your supply chain … or would you just wait it out?” she said.But given some grim messaging from those close to Carney – Canadians might be facing tough decisions. Dominic LeBlanc, the federal minister responsible for Canada-US trade, said last week there’s a lot of work ahead of them and minimised the 1 August deadline.“We’re going to continue to work toward the 1 August deadline,” said LeBlanc to reporters in Washington. “But all of these deadlines are with the understanding that we’ll take the time necessary to get the best deal,” he said.Deal or no deal, the negotiations might reveal that there isn’t a best-case scenario, said Joshi.“What we were used to before Trump, where there were very little tariffs, that reality is slightly over,” she said. “We’ll have to wait and see … but the reality is that there are going to be some tariffs.” More

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      White House to end US tariff exemption for all low-value overseas packages

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      The United States is suspending a “de minimis” exemption that allowed low-value commercial shipments to be shipped to the United States without facing tariffs, the White House said on Wednesday.Under an executive order signed by Donald Trump on Wednesday, packages valued at or under $800 sent to the US outside of the international postal network will now face “all applicable duties” starting on 29 August, the White House said.The US president earlier targeted packages from China and Hong Kong, and the White House said the recently signed tax and spending bill repealed the legal basis for the de minimis exemption worldwide starting on 1 July 2027.“Trump is acting more quickly to suspend the de minimis exemption than the OBBBA requires, to deal with national emergencies and save American lives and businesses now,” the White House said in a fact sheet, referring to the bill known as the One Big Beautiful Bill Act.Goods shipped through the postal system will face one of two tariffs: either an “ad valorem duty” equal to the effective tariff rate of the package’s country of origin or, for six months, a specific tariff of $80 to $200 depending on the country of origin’s tariff rate. More

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      As Trump’s tariff regime becomes clear, Americans may start to foot the bill

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      Burying the hatchet with Brussels, Donald Trump – flanked by the leader of the European Commission – hailed a bold new era of transatlantic relations, an ambitious economic pact, and declared: “This was a very big day for free and fair trade.”That was seven years ago. And then on Sunday, the US president – flanked by a different leader of the European Commission – hailed another new era of transatlantic relations, another economic pact and declared: “I think it’s the biggest deal ever made.”Trumpian hyperbole can typically be relied upon as long as he’s in the room, at the lectern or typing into Truth Social. What matters after that is the underlying detail – and we have very little, beyond a handful of big numbers designed to grab headlines.What we do know, as a result of this deal, is that European exports to the US will face a blanket 15% tariff: a tax expected, at least in part, to be passed along to US consumers. The price of key products shipped from the EU, from cars to medicine and wine, is about to come into sharp focus.This pact is not unique. Trump’s agreement with Japan also hits Japanese exports to the US with a 15% tariff. Most British exports to the US face a 10% tariff under his deal with the UK.A string of countries without such accords, including Brazil, Canada and South Korea, are set to face even higher US tariffs from Friday. The Trump administration currently has a blanket 10% levy in place for US imports, although the president threatened to raise this to “somewhere in the 15 to 20% range” earlier this week.Ignore, for a moment, the chaos and the noise. Put to one side the unpredictable stewardship of the world’s largest economy, and its ties with the world. And forget the many U-turns, pauses and reprieves which have followed bold pronouncements, again and again and again.If you, like many businesses in the US and across the world, are struggling to keep up, take a step back and look at a single number. Since Trump took office, the average effective US tariff rate on all goods from overseas has soared to its highest level in almost a century: 18.2%, according to the Budget Lab at Yale.Trump argues this extraordinary jump in tariffs will bring in trillions of dollars to the US federal government. On his watch, tariffs have so far brought in tens of billions of dollars more in revenue this year than at the same point in 2024.But who picks up the bill? The president and his allies have position this fundamental shift in economic policy as a historic move away from taxing Americans toward taxing the world. But in reality, everyone pays.Tariffs are typically paid at the border, by the importer of the product affected. If the tariff on that product suddenly goes from 0% to 15%, the importer – as you’d expected – will try to pass it on. Every company at every stage of the supply chain will quite literally try to pass the buck, as much as possible.And the very end of the chain, economists expect prices will ultimately rise for consumers. The Budget Lab at Yale estimates the short-term impact of Trump’s tariffs so far is a 1.8% rise in US prices: equivalent to an average income loss of $2,400 per US household.skip past newsletter promotionafter newsletter promotionBig firms that have so far done their best to hold prices steady amid the blizzard of tariff uncertainty are now starting to warn of increases. Inflation, which Trump claims is very low in the US, picked up in June.The president appeared to reluctantly reckon with the reality that Americans may start to foot the bill for his tariffs before setting off for Scotland late last week.Asked about the prospect of using revenue from tariffs to distribute “rebate” checks to US consumers, Trump said: “We’re thinking about that, actually … We’re thinking about a rebate, because we have so much money coming in, from tariffs, that a little rebate for people of a certain income level might be very nice.”Given what inflation did to Joe Biden’s electoral fortunes, and Trump’s keen eye for populist policies, it’s hardly a stretch to imagine those cheques – signed by Donald J Trump – landing in bank accounts in time for the midterm elections next November.And such a move would, indeed, be very nice. Especially as it appears increasingly likely that, after this week, Americans will probably be paying more for almost everything. More