Trump hikes tariffs despite economic warning signs

What happened

President Trump doubled down on his use of tariffs as an economic and foreign policy tool this week, even as a slew of new data indicated that his global trade war is taking a toll on U.S. businesses and households. A day after Trump signed an executive order last week imposing import taxes of up to 41% on dozens of trade partners, the Bureau of Labor Statistics issued a sobering jobs report that showed the country added 73,000 jobs in July, far short of the 104,000 economists expected. Initial jobs estimates for May and June were also revised sharply downward, leaving total hiring for the second quarter at 106,000—the worst non-pandemic quarter for job growth since 2010. Trump responded by firing BLS Commissioner Erika McEntarfer, claiming without evidence that the career bureaucrat had "manipulated" the numbers for "political purposes."

The new tariffs, set to take effect Aug. 7, hiked import duties to their highest levels in more than a century. Trump kept a baseline rate of 10% on countries where the U.S. has a trade surplus, but set higher numbers for the European Union (15%) and at least 67 other countries. Rates were hiked to 35% for Canada, 39% for Switzerland, and about 20% for Taiwan, the Philippines, and Vietnam. After imposing 25% tariffs on India, Trump announced this week that he'd add an extra 25% on Aug. 27, as punishment for the country's purchases of Russian oil. "They don't care how many people in Ukraine are being killed by the Russian war machine," he said. Trump also previewed tariffs on semiconductors and pharmaceuticals; the latter, he said, would eventually "go to 250%."

As job growth lagged, the Commerce Department released figures showing inflation heating up. Consumer prices were 2.6% higher in June than a year earlier, a steeper climb than economists anticipated. Companies including Adidas, Procter & Gamble, and AutoZone said they'd raise prices to offset tariff costs. Ford CEO Jim Farley said the automaker lost $36 million in the second quarter, partly because of tariffs, compared with a $1.8 billion profit a year earlier. He said import taxes on parts and materials would cost Ford $2 billion this year.

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What the editorials said

"The triumphalism is palpable in MAGA land" over Trump's new trade regime, said The Wall Street Journal. But they should "hold the euphoria." The data shows employers "have all but stopped new hiring," and without the health-care sector, which is shielded from economic headwinds, we'd have lost 100,000 jobs. And while Trump hypes the "rebirth of U.S. manufacturing," the sector has lost jobs for three straight months. Exactly how tariffs have affected the jobs market isn't clear; the same can be said for the impact of Trump's crackdown on migrant workers. But the whipsawing uncertainty generated by both "has surely affected business hiring and investment."

These are "tangible indicators" that the economy is responding to Trump's policies "as so many have warned," said the San Antonio Express-News. Yet when confronted with evidence that his trade wars are not a work of "expert-defying genius," Trump "fired the messenger," making the laughable claim that McEntarfer—a respected, veteran public servant—is out to undermine him. The reality is that BLS numbers, produced by hundreds of nonpartisan staffers, are virtually impossible to fudge. But they've become "a target in an intensifying assault on the truth."

What the columnists said

The "folly" of Trump's trade war is "now undeniable," said Robert Burgess in Bloomberg. The second-quarter job figures are a steep drop from the 611,000 jobs created from January to April, drawing "a clear line" to Trump's April 2 tariff rollout. And consumer spending fell in the first half of 2025, according to federal data. If all this "sounds like stagflation"—stagnating growth paired with rising prices and elevated unemployment—"you'd be correct." Economists surveyed by Bloomberg now expect GDP to expand only 1.5% this year, down from 2.8% in 2024.

The auto market illustrates how little Trump's team "actually understands what it's doing," said Dace Potas in USA Today. It claims tariffs will boost U.S. manufacturing, but domestic carmakers are being whacked with tariffs of 25% on imported parts and 50% on imported aluminum and steel. Meanwhile, Japan-made cars face only a 15% import duty. Japanese companies such as Toyota had announced plans to expand U.S. manufacturing, but it now seems "continuing production in Japan will be better."

"We're seeing only the tip of a spear that's pointed right at our wallets," said Jared Bernstein in MSNBC.com. Until now, two "buffers" have dulled the effects of tariffs. Importers stocked up on inventory ahead of tariffs, and sellers swallowed costs to avoid "antagonizing inflation-weary consumers." But firms are now raising prices, and for working Americans "there's a lot of pain to come." This year the average household will take a $2,400 hit from tariffs, according to Yale researchers.

Trump's trade war "is a case study of incoherence," said Fred Kaplan in Slate. He's set "inviolable" deadlines only to break them and has touted supposed deals whose benefits are largely illusory. And much of his agenda is driven by "personal spite" and "shameless extortion." Take his threat of 50% tariffs on Brazil unless it drops criminal charges against the country's former President Jair Bolsonaro, a MAGA ally. Countries are submitting to Trump "in the short run." But they're plotting "paths of revenge and resistance": boycotts of U.S. goods, supply chains that cut us out, increased reliance on suppliers such as China. "Trump is reshaping the world, but not in the way that he imagines."

What next?

As Trump attempts to "unilaterally remake global trade," lawsuits are moving through the courts that "could grind his tariff regime to a halt," said Grayson Logue in The Dispatch. The U.S. Court of Appeals for the Federal Circuit last week heard oral arguments in a case challenging Trump's legal standing to impose tariffs, a power the Constitution grants to Congress. Brought by five small businesses and a dozen Democratic-led states, the suit argues that Trump exceeded his constitutional power in issuing tariffs under a 1977 act that empowers the president to use economic sanctions "to deal with foreign threats and emergencies." Many of the panel's 11 judges "appeared skeptical" of Trump's argument, said Elisabeth Buchwald in CNN.com. Several questioned the administration's claim that trade deficits constitute an emergency—we've "had trade deficits for decades," noted one judge. The 1977 act "doesn't even mention" tariffs, noted another. It may take weeks "or even months" for a verdict. "After that, it could still be challenged before the Supreme Court."