A customer shops a grain isle at New India Bazar, where most merchandise is imported from India and Canada, on Aug. 6, 2025, in Fremont, Calif.
Noah Berger/AP
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Noah Berger/AP
WASHINGTON — President Donald Trump was poised to initiate higher import taxes on numerous countries on Thursday, marking the beginning of the economic repercussions of his prolonged tariff threats on the U.S. economy.
The White House announced that goods from over 60 countries and the European Union would be subject to tariff rates of 10% or more starting just after midnight. Tariff rates of 15% would apply to products from the European Union, Japan, and South Korea, while imports from Taiwan, Vietnam, and Bangladesh would face a 20% tax. Additionally, Trump expects significant investments from countries like the EU, Japan, and South Korea in the U.S.
“I believe we will see unprecedented growth,” Trump stated on Wednesday. He mentioned that the U.S. was collecting “hundreds of billions of dollars in tariffs,” but did not provide a specific revenue figure due to uncertainty about the final tariff rates.
Despite the uncertainty, the Trump administration is confident that the implementation of broad tariffs will bring clarity to the direction of the U.S. economy. By understanding the U.S.’s trajectory, companies are expected to increase investments and boost hiring to revitalize the U.S. economy as a manufacturing powerhouse.
However, there are already indications of negative repercussions on the U.S. economy as businesses and consumers prepare for the impact of new tariffs. Economic data shows a shift in the U.S. economy following Trump’s initial tariff rollout in April, leading to market volatility, negotiation phases, and the eventual implementation of universal tariffs on Thursday.
Post-April reports indicate a slowdown in hiring, a rise in inflationary pressures, and a decline in home values in key markets, according to John Silvia, CEO of Dynamic Economic Strategy.
“A less efficient economy requires fewer workers,” Silvia noted. “Moreover, higher tariff prices reduce workers’ real wages. The economy is now less efficient, and firms are unable to maintain previous real wage levels. Every action has consequences.”
The long-term effects of the tariffs remain uncertain and could unfold over months or even years. Many economists suggest that the risk lies in a gradual erosion of the American economy rather than an immediate collapse.
“We all expect a dramatic, TV-worthy impact, but it’s not that simple,” said Brad Jensen, a professor at Georgetown University. “It will be more like fine sand slowing down the gears.”
Trump has framed the tariffs as a means to reduce the persistent trade deficit. Importers attempted to avoid the taxes by increasing imports before the tariffs took effect, resulting in a 38% increase in the $582.7 billion trade imbalance for the first half of the year compared to 2024. Total construction spending has declined by 2.9% over the past year, and the factory jobs promised by Trump have led to job losses instead.
The lead-up to Thursday reflects the chaotic nature of Trump’s tariff policies, which have been rolled out, rescinded, delayed, increased, imposed through letters, and hastily renegotiated.
The process has been so confusing that key trade partners’ officials were unsure at the beginning of the week whether the tariffs would begin on Thursday or Friday. The language of the July 31 order to postpone the tariffs from August 1 stated that the higher tax rates would take effect in seven days.
On Wednesday morning, Kevin Hassett, director of the White House National Economic Council, was asked if the new tariffs would start at midnight on Thursday, and he advised reporters to check with the U.S. Trade Representative’s Office.
On Wednesday, Trump announced an additional 25% tariff on India for its purchase of Russian oil, increasing their total import taxes to 50%. He also mentioned that import taxes would be imposed on pharmaceutical drugs and announced 100% tariffs on computer chips, indicating that the U.S. economy could remain in a state of uncertainty as it awaits the impact.
Furthermore, Trump’s use of a 1977 law to declare an economic emergency for imposing tariffs is facing legal challenges. A ruling from last week’s hearing before a U.S. appeals court could force Trump to find alternative legal justifications if judges determine that he exceeded his authority.
Even individuals who worked with Trump during his first term doubt that the economy will smoothly navigate the challenges ahead, such as Paul Ryan, the former Republican House speaker, who has become a critic of Trump.
“There’s no logical explanation for this other than the president’s desire to raise tariffs based on his whims and opinions,” Ryan told CNBC on Wednesday. “I anticipate turbulent times ahead as legal challenges are likely.”
Despite these challenges, the stock market has remained strong throughout the tariff uncertainties, with the S&P 500 index rising over 25% from its April low. The market’s recovery and the income tax cuts from Trump’s tax and spending policies enacted on July 4 have instilled confidence in the White House that economic growth will accelerate in the near future.
Currently, Trump envisions an economic boom while the world and American voters observe nervously.
“Only Donald Trump can afford to be indifferent to the uncertainty he’s causing,” said Rachel West, a senior fellow at The Century Foundation who worked on labor policy in the Biden White House. “The rest of Americans are already bearing the cost of that uncertainty.”
