The headline news this morning. Bloomberg:
Trump eyes tariffs of 10% to 15% for 150 countries
Over many centuries people learned to trade with one another, peacefully, to get what they wanted. Trade with family, trade with friends, trade with the next town…with a foreign country…with people you never met in places you never heard of.
As civilization expanded, so did trade. The most successful empires expanded the trading area and financed themselves largely on trading wealth — Carthage, Rome, the Mongols, Venice, Holland, England and America.
But now we’re going in the other direction…squeezing off trade as if we were kinking a garden hose. And for reasons that often have little to do with trade itself.
— To fight the flow of drugs. The New York Times (also this morning):
Trump Has Promised More Tariffs on Mexico.
President Trump has threatened to increase Mexico’s tariff rate to 30 percent starting Aug. 1, claiming the country hasn’t sufficiently tackled drug cartels.
— To punish international judges when they don’t see things your way. POTUS:
By the authority vested in me as President by the Constitution and the laws of the United States of America… I, DONALD J. TRUMP, President of the United States of America, find that the International Criminal Court (ICC), as established by the Rome Statute, has engaged in illegitimate and baseless actions targeting America and our close ally Israel.
— To suborn a foreign nation’s internal justice system. CBS News:
Trump threatens Brazil with 50% tariff, citing “Witch Hunt” against Bolsonaro
— To reward a big campaign donor. Embraer is Brazil’s biggest airplane manufacturer. And its major competitor — Boeing — is one of Trump’s biggest supporters. Business Insider:
Around three-quarters of Embraer’s business jets and nearly half of its regional airliners are delivered to US clients.
“Given the relevance of this market, we estimate that if this [Trump’s tariff plan] moves on at this magnitude, we will have an impact similar to that of COVID-19 in terms of the decline in the company’s revenue,” CEO Francisco Gomes Neto said, per Reuters.
— And of course, to force Americans to pay more for imports while rewarding friends with contracts. Times Now:
President Donald Trump announced a landmark trade agreement with Indonesia on July 15, 2025, via Truth Social, opening the Southeast Asian nation’s market to U.S. goods for the first time. The deal includes Indonesia buying $15 billion in U.S. energy, $4.5 billion in agricultural products, and 50 Boeing jets, while paying a 19% tariff on exports to the US.
— Or how about this? The US dollar has lost 10% of its value, worldwide, so far this year. And US policies (BBBA, tariffs, deportations…) are almost sure to mean even greater losses for dollar holders. But don’t even think of diversifying. Fortune:
Donald Trump threatens 100% tariff on countries that turn away from the dollar
— And how’s this for winning friends and influencing people? BBC:
Trump threatens extra 10% tariff on nations that side with Brics
“Any country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% tariff. There will be no exceptions to this policy,” Trump posted on his Truth Social platform on Sunday.
What are the consequences of all this trade squashing?
Money Talks:
U.S. Trade Drops Second Straight Month As Tariff Effects Emerge
…uncertainty drives shifts in global commerce patterns and gold trading reaches historic levels.
The Daily Mail:
Americans felt a sting at the grocery store last month.
Overall inflation hit 2.7 percent in June compared to a year earlier, the Labor Department said Tuesday.
That is 0.3 percent higher than last month’s 2.4 percent reading.
And The Wall Street Journal:
A chaotic rollout of tariffs is starting to filter through to price tags on store shelves. An immigration crackdown is beginning to weigh on jobs growth, measured by federal surveys. Taken together, the impact of President Trump’s whirlwind six months back in office is showing up in the economy.
Stay tuned…
Regards,
 |
Bill Bonner,
For The Daily Reckoning Australia
