Trump’s Latest Tariff Turnabout Deepens Confusion About Trade Policy

You’re in good company if you’re confused about what import taxes the U.S. plans to charge its trading partners in the coming months. Experts and laypeople alike have been blindsided by the dizzying stream of tariff announcements from the White House in recent days.

The latest twist in President Donald Trump’s trade war came this week when he announced that his July 9 deadline for higher tariffs on multiple countries would be delayed until Aug. 1. He originally said the new deadline was not firm, then posted the opposite on social media, declaring that “No extensions will be granted.”

The on-again, off-again tariff announcements have baffled even experts who are optimistic about the prospects for the outcome of the trade wars Trump launched when he took office.

James Mohs, a professor of accounting at the University of New Haven, told Investopedia he thought Trump’s campaign of steeply raising import taxes had a good chance of accomplishing one of its objectives. Mohs, whose specialty is in global tax compliance, thinks the tariffs could get other countries to make deals, lowering their own trade barriers to U.S. exports, but that the process has been chaotic.

“It’s very, very confusing, because even for us, we don’t know what end is up, because it changes daily,” he said. “There’s just so much confusion in the whole process with regards to his Aug. 1 deadline.”

The business world is just as flummoxed. In recent surveys, business leaders have said they’re uncertain about tariffs, and are in some cases delaying investment and hiring decisions until they have a better idea of where things are going.

“Economic fundamentals appear solid at this juncture, but uncertainty is pervasive,” Jack Kleinhenz, chief economist of the National Retail Federation, said in a commentary. “There are many crosscurrents surrounding tariffs, immigration and deregulation, and everyone is sorting through what the tariff rates are going to be, how they will impact inflation for retail products and, importantly, how long they will be in place.”

Economists have said the uncertainty itself is a drag on the economy, and a major reason that forecasters have not completely ruled out the possibility of a recession in the coming months, despite reports showing the job market is still chugging along.

Will The Tariffs Stick This Time?

A major question is whether Trump will go through with the high tariffs on multiple trading partners he announced in April in an event he dubbed “Liberation Day.”

Trump has said the steep tariffs on countries with whom the U.S. has a trade deficit are intended to rebalance trade, get other countries to stop unfair trade practices, and give an edge to U.S.-based manufacturing. So far, the U.S. has struck only one preliminary trade deal with a country targeted by “reciprocal” tariffs: Vietnam.

Trump ordered a 90-day “pause” on the tariffs shortly after they went into effect in April to allow his negotiators time to reach agreements with their counterparts from other countries. The extension to Aug. 1 bought more time, but the two delays have raised questions about how serious the latest deadline actually is.

Mors said the extensions have threatened Trump’s credibility among foreign leaders to the point where he can no longer afford to kick the can down the road again. If Aug. 1 arrives without progress on trade deals, he predicted Trump would actually start charging the tariffs this time.

“He’s drawing a line in the sand again,” Mors said. “And I don’t think he can survive drawing too many lines.”