The President reportedly had five tariff goals:
- Better trade deals. What Trump said: "I have great respect for President Xi of China, great respect for China, but they were taking tremendous advantage of us."
- Boosting American industry. What Trump said: "Jobs and factories will come roaring back into our country… We will supercharge our domestic industrial base."
- Facing off with China. What Trump said: "I have great respect for President Xi of China, great respect for China, but they were taking tremendous advantage of us."
- Raising revenue. What Trump said: "Now it's our turn to prosper, and in so doing, use trillions and trillions of dollars to reduce our taxes and pay down our national debt, and it'll all happen very quickly."
- Lower prices for US consumers. What Trump said: "Ultimately, more production at home will mean stronger competition and lower prices for consumers. This will be indeed the golden age of America."
Income from U.S. tariffs did hit a record level in April as revenue from the new trade policy started kicking in.
Customs duties totaled $16.3 billion for the month, some 86% above the $8.75 billion collected during March and more than double the $7.1 billion from a year ago.
While the United States is still running a massive budget deficit, the influx of tariffs helped shave some of the imbalance for the month in which the Treasury generally runs a surplus because of the income tax filing deadline.
The surplus amounted to $258.4 billion for the month, up 23% from the same period a year ago. That cut the fiscal year-to-date total to $1.05 trillion, which was still 13% higher than a year ago.
However, the tariff policy is projected to cause a sharper slowdown in economic growth in the United States and around the world than previously expected, the Organization for Economic Co-Operation and Development (OECD) said in a Tuesday report.
The organization predicts that GDP growth in the United States will slow to nearly half its 2024 pace in the next two years, falling from 2.8% last year to just 1.6% in 2025 and 1.5% in 2026 due to the "rising trade costs."
#12
Global growth as a whole is expected to shrink from 3.3% in 2024 to 2.9% in both 2025 and 2026, dropping below the at least 3% growth recorded year-over-year since 2020.
The forecast is notably grimmer than the one the OECD released in March, when it projected the American economy would grow at a 2.2% pace this year and the world as a whole would experience 3.1% growth.
"The global economy has shifted from a period of resilient growth and declining inflation to a more uncertain path," said OECD Secretary-General Mathias Cormann.
"Governments need to engage with each other to address any issues in the global trading system positively and constructively through dialogue, keeping markets open and preserving the economic benefits of rules-based global trade for competition, innovation, productivity, efficiency, and ultimately growth."
#19
Executives at major corporations, including Target, Goldman Sachs, and Pepsi, have been mentioning the same one-word boogeyman: uncertainty.
A couple of court rulings last week thrust Trump's steepest tariffs into limbo, adding another layer of unpredictability as federal appeals court judges determine whether a major swath of the policies pass legal muster.