You may have noticed that for the last few months, talks of tariffs seem to have settled down. Of course, part of the driving force behind this comparative silence is that days feel like weeks, weeks feel like months, and months feel like years in our world of Trumpian news cycles, fueled by world-changing events that provide far juicier topics for politicians and media alike. After all, who is going to bother reporting on future systems of trade with all of those boring numbers and charts when we can have a nationwide panic over what turned out to be the shortest World War in history?
But the main reason for the weeks of seemingly tariff-free calm we’ve enjoyed was Trump’s decision to announce a 90-day pause in his entirely voluntary trade war with the entire world. The problem? These 90 days are now up, and we are about to witness the return of more tariff chaos.
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South Korea and Japan, both allies of the United States, will be hit with 25% tariffs from Aug. 1 onward — a “firm but not 100% firm” deadline.” Tariffs to be imposed on other countries include 40% for Myanmar and Laos, 36% for Thailand and Cambodia, 35% for Serbia and Bangladesh, 32% for Bosnia & Herzegovina, 30% for South Africa, and 25% for Kazakhstan, Malaysia, and Tunisia.
“If you wish to open your heretofore closed Trading Markets to the United States, eliminate your tariff, and Non Tariff, Policies and Trade Barriers, we will, perhaps consider an adjustment to this letter,” Trump declared in letters addressed to Japanese and South Korean leaders, announcing the tariffs.
Now, setting aside the argument over the legitimacy of Trump’s policy of reciprocal tariffs, an issue oversimplified as if international trade is a game of swapping Pokémon cards on the schoolyard, let’s look at this issue through the lens that supposedly matters most to the Trump administration: economic growth. Because it’s not just that this return to tariff-mania will likely undo Trump’s favorability ratings, which declined solely because of this economic policy, but that tariffs fly in the face of the supposedly fundamental goals of his presidency.
Growth requires investment, and investment only comes when there is stability. Stability can come in a variety of forms, of course, but as long as businesses and markets can reasonably predict what will happen in the coming years, investment will continue, thereby fueling growth.
But what happens when businesses and markets can’t even predict what will happen tomorrow, let alone in the years ahead? Investment dries up, and growth shrinks — or even disappears.
Don’t be fooled by the PR campaigns built on the “huge” trillion-dollar announcements of future investments by massive corporations trying to ingratiate themselves within the Trump administration in return for a tariff carveout. You may notice that these investments are promises that coincidentally span beyond Trump’s second term in office. It’s nice for press releases, but will it lead to anything more? Who knows.
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Meanwhile, other businesses that are forced to live in the here and now have no such luck and have to adapt to an environment that changes by the hour. For example, Illinois-based toymaker Learning Resources focused on shifting production from China to Vietnam and India after seeing projected import taxes going from $2.5 million in 2024 to more than $100 million in 2025. But what happens if Trump imposes further tariffs on India or Vietnam?
This case exemplifies the entire problem. Why would any company invest more than they absolutely have to if one Truth Social post could upend their strategy for the coming years? That fuels uncertainty, and uncertainty is an anchor for investment and growth. So if you want the economy to grow, focus less on the PR coming out of the White House and more on economic reality.
Ian Haworth is a syndicated columnist. Follow him on X (@ighaworth) or Substack.