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- Trump administration returns to trade, tariff chaos — and no new deals</p>
<p>Rob WileJuly 11, 2025 at 12:24 AM</p>
<p>President Donald Trump with Commerce Secretary Howard Lutnick, left, and Treasury Secretary Scott Bessent. (Win McNamee / Getty Images file)</p>
<p>Following the passage of its tax cut and spending bill last week, the Trump administration promised more trade deals.</p>
<p>Instead, it's been a return to chaos.</p>
<p>So far this week, President Donald Trump has warned he plans to impose 50% tariffs on copper-based goods by Aug. 1, his new deadline for countries to come to the table and negotiate. That sent copper prices to all-time highs. He also said pharmaceutical products could face duties as high as 200%, though firms would have as long as 18 months to prepare.</p>
<p>Meanwhile, Treasury Secretary Scott Bessent indicated he expected to announce new trade pacts by midweek, while dozens of other countries would be receiving letters laying out tariff proposals.</p>
<p>"We are close to several deals as always," Bessent said on CNN's "State of the Union" Sunday. "There's a lot of foot-dragging on the other side, and so I would expect to see announcements over the next couple of days."</p>
<p>He continued: "When we send out the 100 letters to these countries, that will set their tariff rate. So we're going to have 100 done in the next few days."</p>
<p>As of Thursday, no new deals have been announced, while Trump has published just 22 letters, many to minor trading partners like Brunei, Moldova and Sri Lanka.</p>
<p>In the case of Brazil, which now faces a potential 50% levy, the president has abandoned the pretense of using his tariff policy to shore up trade deficits. The U.S. has a trade goods surplus with the South American nation. Instead, he cited its treatment of former President Jair Bolsonaro as a rationale for the tariffs.</p>
<p>Current Brazilian President Luiz Inácio Lula da Silva said his country would respond with "reciprocity."</p>
<p>It's a reversion to the frenzied initial weeks of Trump's second term, when the president would announce tariff objectives that could seemingly shift in a matter of hours. Amid signs of a slowing economy, the president has chosen to inject it with another dose of uncertainty. While the market reaction has so far been more muted compared to the record sell-off that occurred in the wake of Trump's shock "Liberation Day" speech on April 2, the latest announcements have slowed the momentum that helped return stocks to all-time highs.</p>
<p>"It is possible these tariffs will never be implemented, as some in the market are hoping for," J.P. Morgan analysts wrote in a note to clients Wednesday. "But our call that the trade war détente would not hold is still tracking, and we still see the US effective rate settling closer to 18% than its current 14%."</p>
<p>The new duty levels announced in the letters show the president recapitulating the eye-watering percentages he announced on "Liberation Day." Earlier this week, Trump offered an explanation for the figures, saying they were "based on common sense, based on deficits, based on how we've been treated over the years, and based on raw numbers."</p>
<p>"Brazil as an example, has not been good to us. Not good at all," Trump said.</p>
<p>The White House has said the new round of tariffs would be enacted under the International Emergency Economic Powers Act. It's an authority that is currently being litigated in court. Yet it is not immediately evident how such an explicitly political rationale would qualify. A White House official said it would still apply to the other aspects Trump mentions in his letter, namely "unfair treatment" in relations with the U.S. — and that more deals would be coming shortly.</p>
<p>The administration continues to insist that the tariff strategy is working. The president has cited billions in federal revenues raised by the new duties, while also touting additional billions in investments made by firms in the U.S. Yet analysts see tariff revenues as far from adequate to address the United States' fiscal imbalances, and say the tariffs themselves represent a drag on U.S. growth.</p>
<p>Meanwhile, many of the investments Trump has heralded were already in the works. Others have been paused. And large projects, like new factories and assembly lines, can take years to bring online.</p>
<p>Others note the administration is making it more expensive for existing U.S. manufacturers to produce goods by raising the cost of key imports like steel, aluminum and copper while inviting countries to introduce retaliatory tariffs on U.S. exports.</p>
<p>It's possible that the turbulence will subside. Stock price volatility has dropped to its lowest levels of the year, while stocks remain at all-time highs. In a note to clients Thursday, analysts with Capital Economics dismissed the current patch as mostly bluster that would have little in the way of wider market implications.</p>
<p>"Donald Trump's planned imposition of a 50% tariff on Brazil for seemingly political reasons may represent a new milestone," they wrote, "but Brazil simply isn't a big enough trading partner of the US to rattle global markets. For that to happen, negotiations with either the EU or China would probably have to sour."</p>
<p>Yet others, including the Federal Reserve, continue to brace for inflation. In a note to clients Thursday, analysts with BNP Paribas said they expect the Federal Reserve to hold interest rates at current levels for the rest of the year as the inflation effect begins to be felt around the fall.</p>
<p>"It remains eminently possible that companies opt to pass through tariff costs in the fall rather than summer," they wrote. "It could be hard to avoid a still-present risk of tariff inflation on the horizon, in our view, even if no visible effects arise over the summer."</p>
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