Big trade deals with Japan and the European Union have injected momentum into President Trump’s trade agenda and knocked his critics back on their heels.
Mr. Trump’s trade plans seemed stuck in neutral a few months ago, making it a punching bag for economists and pundits. But now countries are opening their markets and throwing billions of dollars at U.S. projects, making deals that avoid tariffs in the high double-digits but nevertheless agreeing to higher tariffs that they can stomach.
Mr. Trump and his team say that’s good for American workers and vindicates their maximum-leverage approach.
“Where are the ‘experts’ now?” Commerce Secretary Howard Lutnick crowed on X after Mr. Trump struck an EU deal that many Europeans saw as lopsided in favor of the U.S.
Mr. Trump has taken a tortured path to his Aug. 1 deadline to reset trade terms with the rest of the world.
He pulled back on sky-high tariffs in April due to market panic, but he left a 10% tariff on all imports and hefty tariffs on cars, steel and aluminum.
SEE ALSO: Foes of Trump’s tariffs get their day in court and a shot at unraveling his trade deals
Some of the economists and skittish lawmakers — “panicans,” in White House parlance — who feared tariffs would tank the economy are rethinking their doom and gloom.
“That didn’t happen,” television host and commentator Bill Maher said in a mea culpa about his predictions. “It could happen tomorrow, [but] I’m just saying that’s reality.”
The International Monetary Fund on Tuesday upgraded the economic outlook for the global economy because the U.S. tariffs haven’t been as damaging as feared.
It forecast 3% growth for the globe in 2025, down from 3.3% in 2024 but better than its 2.8% forecast in April.
There’s been little indication of systemic inflation from tariffs, and job numbers remain robust.
The Treasury has collected nearly $125 billion in tariff payments this year, or more than double the amount this time last year, according to the Penn Wharton Budget Model.
SEE ALSO: U.S. economy rebounds a surprisingly strong 3% in the second quarter
Not everyone is sold on Mr. Trump’s approach.
Importers who bring products into the U.S. must pay the tariffs, and those costs might be passed to consumers as the levies take full effect.
The highest nation-by-nation tariffs will kick in during August, and companies will soon run out of non-tariffed stock. Some companies could move operations into the U.S., as Mr. Trump wants, while others will raise prices.
Sen. Josh Hawley, Missouri Republican, filed legislation that would use some tariff revenue to cut rebate checks to working Americans. That’s raised questions among some Republicans about who bears the brunt of the levies, which Mr. Trump characterizes as payments from foreign entities.
“Why do we need rebates if foreign nations are paying the tariffs? And how bout Congress exercises its constitutional authority and eliminates tariff tax rather than trying to be central planners redistributing [money],” Marc Short, who served as chief of staff to former Vice President Mike Pence, wrote on X.
Separately, an analysis by the Washington Center for Equitable Growth found the domestic manufacturing industry could see factory costs rise 2% to 4.5% this year due to the higher costs of materials, or “inputs,” they used from the global supply chain.
Mr. Trump shows no signs of budging from his long-held belief in tariffs.
He views the levies as a great way to force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.
For the White House, the clearest sign of success came from the European leaders who said they were overmatched in recent U.S.-EU negotiations.
French officials called the pact a “dark day” for Europe, while Spanish Prime Minister Pedro Sánchez said he embraced the deal “without enthusiasm.”
“The entire European press is singing the president’s praises right now, amazed at the deal he negotiated on behalf of Americans,” Vice President J.D. Vance said on social media.
Treasury Secretary Scott Bessent said the deal was proof that Mr. Trump is “the world’s great negotiator, and the American people are the beneficiaries.”
Mr. Trump has a lifelong affinity for tariffs and speaks highly of President William McKinley, who served from 1897 to 1901 and wielded the levies broadly.
Mr. Trump says his immediate predecessors didn’t understand the power of tariffs for creating revenue and leverage in foreign negotiations. He says the levies will close trade deficits, in which countries sell plenty of goods to Americans but don’t buy nearly as much from U.S. producers.
“The president just likes tariffs. That’s it. It’s a gut thing. He’s been consistent about it for 40 years. He likes tariffs, and all the arguments he and his team are making are after-the-fact rationalizations,” said Ryan Young, a senior economist at the Competitive Enterprise Institute. “That means the road ahead will mean more of what we’ve seen so far. President Trump will propose tariffs, withdraw some of them, go through with some of them, make deals with some countries, break some of those deals and honor others, and renegotiate them for as long as he is in office.”
Mr. Trump says his full-court pressure is paying off. Recent deals will help the U.S. tap into British and Vietnamese markets, for instance, while a deal with Indonesia will help the U.S. procure copper.
The Japan and EU pacts, when combined, are supposed to spur over $1 trillion in foreign investments in U.S. projects.
“The simple reality is that President Trump has, in record time, used tariffs to strike trade deals that secure unprecedented market access for American industries, farmers, and workers to economies that combined are worth over $30 trillion and are home to over one billion people,” White House spokesman Kush Desai said. “The days of lopsided ‘free’ trade deals giving unfettered access to the American economy, the world’s biggest and best consumer market, to foreign exporters who imposed one unfair trade barrier after another to box out American exports ended the moment President Trump took office.”
The countries on the other side of the negotiating table get access to aircraft and other U.S. technologies. But their main achievement is simply knocking down U.S.-imposed tariffs to something more manageable.
One of Mr. Trump’s biggest successes is shifting perspective.
A roughly 15% across-the-board tariff would have been unthinkable to many business leaders a year ago. Now, it seems like a solid approach compared to the sky-high rates Mr. Trump threatened.
Whether Mr. Trump’s tariffs create the U.S. manufacturing boom Mr. Trump promised remains to be seen.
Mr. Lutnick, speaking to CNBC, said trade deals and tariff rates will be set by the end of the week.
A China deal will take longer, since negotiators are working on a separate track with the world’s second-largest economy.
“But for the rest of the world, we’re going to have things done by Friday,” Mr. Lutnick said. “August 1 is the date that we’re setting all these rates, and they are off to the races after that.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.