Trump keeps bragging about all the tariff deals he has been making over the past few weeks. In reality, the majority of these “deals” consist of a letter from Trump to a country’s government, telling them what the new tariffs will be. The only option left open for them to offer The Donald new incentives - such as lower tariffs on their side or big investments in the US. If their bribe is big enough, then he will consider not over-charging them quite as much. Sort of like the new school bully offering to only take half of your lunch money, as long as you give him your new phone, jacket and sneakers. And maybe introduce him to your sister.
The New York Times had a good article recently on the recent EU deal. Trump had claimed that he had (magnanimously) offered to drop tariffs on EU goods entering the US from his threatened 30% to 15%. In order to gain this gracious concession from him, the EU (allegedly) agreed to buy $750 billion worth of US energy and invest $600 billion into the US. And to charge 0% on goods they get from the US.
His mouthpiece, Howard Nudnick, claims, "The European Union is going to pay 15 percent, and they sell us $600 billion with the goods. That's $90 billion dollars for America." I can’t believe he and Trump are dumb enough to think that it’s the EU that pays that money to the US, that it's not basically a sales tax that US importers will pay and pass on to consumers. I can believe many of Trump’s supporters are still dumb/naive enough to believe it. Prices will rise, especially on goods that the poor buy, people will buy less, and blame will be assigned, somewhere. His long-term ‘strategy’ is for all those overseas companies to build plants in the US. That will take time and money, but I’m sure there will be generous government grants offered. Ongoing production costs will likely be higher, especially if their production needs other imported and tariffed components, and has to pay US salaries. But, this does give them access to a big market and means more jobs for skilled workers. Plus, these companies can always raise their prices, if Trump continues to block ‘foreign’ competition.
According to the NYT article, that US $750 billion purchase on energy is over a period of three years and includes the current $250 billion. Experts say such a big increase is unlikely to really happen, due to political and market constraints. As for the $600 billion in investment, the EU merely asked all its members about possible future US investment plans and then totalled it all up - $600 billion.
This US-EU announcement was based on more than just a letter, but it’s still not really a deal. No list of items with tariffs, no enforcement mechanism, no timelines, no dispute resolution procedure, no schedule of energy purchases or US investments. Nothing signed, he's been duped, he’s been flimflammed right back. Maybe he doesn’t care, and it’s all about perception, not facts. As for the EU, I assume they are just buying time until the inevitable Trump and Republican slump in the 2026 mid-terms.
Speaking of deals and letters, Canada has been notified of a 35% tariff starting August 1 on goods not covered by CUSMA. Plus 50% on copper and maybe 200% on parmaecuticals. Recent additions already include 50 % on steel and aluminum, 34% on lumber, 25% on autos, and 10% on potash. All resulting in a drop in sales as well as thousands of job losses. And in the US, these tariffs mean higher costs for them and product shortages, so a slump in their economy too.
Will this Friday’s deadline change? Trump has posted today on his “Truth” Social - “THE AUGUST FIRST DEADLINE IS THE AUGUST FIRST DEADLINE — IT STANDS STRONG, AND WILL NOT BE EXTENDED. A BIG DAY FOR AMERICA!!!”
I’m sure Canada and the world will eventually adjust to life with less US dominance, but it will take time and hurt all economies, even the US one. When Trump finally quits/dies there may be a bit of a rebound toward more sanity, but I fear some of his negative impact on society will remain.
On that negative note, I’ll go back to watching West Wing reruns. Ah, those were the days.
The title says it all.