President Trump’s on-again, off-again tariffs have prompted investors to bet that he will “always chicken out” and given businesses and foreign leaders hope that the leader of the world’s largest economy will ultimately back down from his threats if they prove too economically disruptive.
Events of the past week have cast serious doubt on that bet. As Mr. Trump renews trade threats against more than two dozen trading partners, he is once again proving his fondness for tariffs, and embracing import taxes in a way that no other president has since the Great Depression.
A self-described “tariff man,” Mr. Trump has continually extolled the virtues of heavily taxing imports as a way to raise revenue and cajole factories to relocate to the United States. While the president may ultimately give way on some of his most recent threats, he has still steadily and dramatically raised tariffs to levels not seen in a century.
Over the past week, Mr. Trump has threatened 25 trading partners with punishing levies on Aug. 1 unless they sign trade deals that Mr. Trump finds acceptable. The list of countries he plans to raise tariffs on include some of America’s biggest sources of imports, including the European Union, Japan, Mexico, Brazil, South Korea and Thailand. Those countries had been in active talks with the United States about resolving Mr. Trump’s concerns in an effort to avoid tariffs.
Several may still reach deals to avert some of the levies, including India, the European Union, Taiwan and Japan.
But even if some deals are reached, American tariffs on trading partners are still likely to rise significantly. That was the case with the two trade agreement frameworks that the Trump administration has so far announced, with Britain and Vietnam, both of which leave double-digit tariffs in place.
Since Mr. Trump came into office in January, the average effective U.S. tariff rate has soared to 16.6 percent from 2.5 percent, according to tracking by the Budget Lab at Yale University, a nonpartisan research center. That’s a dramatic increase compared with the president’s first term, when it rose to 2.5 percent from 1.5 percent, primarily as a result of Mr. Trump’s trade war with China.
If all the tariffs that the president is now threatening on trading partners go into effect on Aug. 1, that average tariff rate would rise to 20.6 percent, the highest since 1910. According to the Yale Budget Lab’s calculations, that would also top the level of the Smoot-Hawley tariffs, which worsened the Great Depression.
“What happened in his first term is not nearly in the ballpark of what is happening now,” said Ernie Tedeschi, the lab’s director of economics.
Some Trump advisers had projected a flurry of deals by July 9, after Mr. Trump imposed steep global tariffs in April but then quickly paused them for 90 days to carry out trade talks. Despite the efforts of foreign countries and his trade advisers to negotiate deals, few have emerged.
Mr. Trump’s advisers have portrayed the lack of agreements as a negotiating tactic. Speaking on ABC Sunday morning, Kevin Hassett, the director of the U.S. National Economic Council, said that the president had seen “some sketches of deals” negotiated by his advisers, but that he thinks they “need to be better.”
“These tariffs are real if the president doesn’t get a deal that he thinks is good enough,” Mr. Hassett said. “But, you know, conversations are ongoing, and we’ll see where the dust settles.”
But foreign governments are puzzled about what, exactly Mr. Trump wants, given that the negotiations have not produced the kind of deal he finds acceptable. The administration also appears to lack the time or bandwidth to make deals with more than a handful of the trading partners Mr. Trump is now threatening. As a result, there is a growing sense that what the president actually wants are tariffs that would block foreign products from the United States, rather than deals that could boost trade and open markets.
Besides the tariffs it is threatening on foreign nations, the administration appears set to roll out a variety of levies on critical sectors like semiconductors, pharmaceuticals, airplanes, lumber and other products, with some tariffs potentially coming later this month.
Mark Diplacido, who served at the Office of the United States Trade Representative during the first Trump administration, said that the current administration’s posture was that “they are fully comfortable letting these rates and these letters kick in.”
“The implication at this point is it’s time to make your final pitch, and if we’re not happy with this, we’re ready to let these go into effect,” said Mr. Diplacido, now a policy adviser at American Compass, a conservative think tank.
Kelly Ann Shaw, a partner at Akin Gump and a former Trump administration official, said that attitude was likely to translate into higher tariffs overall. It was clear that tariffs were “one of the pillars of the second Trump administration’s economic policy,” she said. For most foreign products, tariffs appeared to be settling somewhere between 10 and 25 percent.
“At least for the rest of the Trump administration, and likely beyond, we’ll see some of those tariff rates go up pretty significantly than where they were on Jan. 19 of 2025,” the day before the president’s inauguration, Ms. Shaw said.
One remaining factor that could significantly lower Mr. Trump’s tariffs are the challenges that are now proceeding through the legal system. Federal courts have called into question the legal authority that Mr. Trump has used to threaten his global tariffs, and they are expected to rule on that question this fall.
Mr. Trump’s advisers have said that they have other legal channels to impose tariffs if the courts rule against them, but those methods were not likely to give the Trump administration as much scope and flexibility as it currently has asserted.
The president and many on his team argue that low tariffs have left the country at a disadvantage in past decades, allowing Americans to import cheap products that put U.S. factories out of business and left the country dependent on foreign suppliers. While some open-market Republicans and business owners privately oppose tariffs, they have been reluctant to speak out publicly against a president who often seeks retribution for his critics.
A White House official, who declined to be named because he was not authorized to speak publicly, said that the administration did not view high tariffs and trade deals as mutually exclusive, and that it had purposely crafted trade deals, for example with Britain, that had left high tariffs in place.
Mr. Diplacido said that one reason the administration had put high tariffs on many trading partners globally was related to China. In the first term, the Trump administration imposed hefty tariffs on Chinese exports. But while the U.S. trade deficit with China fell, trade deficits with many other partners started to grow. The United States began importing more products from factories in Mexico, Vietnam and elsewhere that were either run by Chinese companies or used lots of Chinese inputs and raw materials.
Mr. Diplacido said that China was “the biggest offender,” but that “targeting them directly wasn’t enough to bring down the overall U.S. trade deficit, so this wider global approach has been necessary to address that problem.”
“Until third markets are willing to coordinate to rebalance trade globally,” he added, “I think that additional pressure and the higher tariffs are going to be necessary to get the overall U.S. trade deficit down, which I think is the principal goal.”
Expanding tariffs from China to the entire world also significantly increases the burden for U.S. importers. But in the United States, the full economic effect of tariffs has yet to be felt. While economic data shows that tariffs have begun to push up prices for some goods, overall consumer price inflation has remained muted.
Economists caution that tariffs have only been in place for a short time, and more noticeable price increases could be on their way in the coming months. Mr. Tedeschi said it was “wrong” to say there was no evidence of negative economic effects, pointing to a significant rise in recent prices for appliances, electronics, furniture, used cars and auto parts, categories of goods for which prices typically fall year-to-year overall, he said.
“It takes time for tariffs to work their way through the economy,” Mr. Tedeschi said.
But Mr. Trump and his advisers have seized on recent data to argue that tariffs have little effect on prices. The lack of broad price increases so far also appears to be encouraging the president to double down on his policies.
Mr. Hassett said Sunday that consumer inflation was “the lowest it’s been in over a decade” and that Mr. Trump’s predictions that foreign suppliers would bear the cost of tariffs had been borne out.
“I think that that’s probably affecting his negotiating position because we’ve got all this empirical evidence that his position has been proven correct in the data,” he said.
Tony Romm contributed reporting.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
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