STORY: ::Analysts say they're worried Trump's new tariff threats could cause U.S. economic and diplomatic fallout

::July 12, 2025

::Washington, D.C.

::Mary Lovely, Senior Fellow, Peterson Institute for International Economics

"The tariffs have been on again, off again, it has created an enormous amount of uncertainty. We saw the, you know, port volumes hit record highs as companies were trying to forerun these tariffs. So they have inventories, those are going to come to an end. And we are going to see price increases, job losses, and how exactly that is going to play out? We don't know. This is unprecedented."

::Half Moon Bay, California

:: Alan Sykes, Professor of Law, Stanford University

"We are in a situation where the President of the United States just goes back on commitments that were seriously and carefully negotiated by prior U.S. administrations, and to a certain extent by his, the first time around. And that leads to the question of whether countries will consider us credible parties in negotiations. Will they think of us as a country that will make a commitment on paper and then just break it when it is convinient to do so? That's a worrisome thing for me because it cuts beyond the trade sphere."

In an escalation of a trade war that has angered U.S. allies and rattled investors, Trump announced the latest tariffs in separate letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum that were posted on his Truth Social media site on Saturday.

The EU and Mexico, both among the largest U.S. trading partners, responded by calling the tariffs unfair and disruptive while pledging to continue to negotiate with the U.S. for a broader trade deal before the deadline.

Trump sent similar letters to 23 other trading partners this week, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20% up to 50%, as well as a 50% tariff on copper.

The U.S. president said the 30% rate was "separate from all sectoral tariffs," indicating 50% levies on steel and aluminium imports and a 25% tariff on auto imports would remain.

The August 1 deadline gives the targeted countries time to negotiate agreements that could lower the threatened tariffs. Some investors and economists have also noted Trump's pattern of backing off his tariff threats.