Previously, President Trump lashed out against the government of Brasil led by Brazilian president, Luiz Inácio Lula da Silva, saying, “Brazil is doing a terrible thing on their treatment of former President Jair Bolsonaro. I have watched, as has the World, as they have done nothing but come after him, day after day, night after night, month after month, year after year! He is not guilty of anything, except having fought for THE PEOPLE. I have gotten to know Jair Bolsonaro, and he was a strong Leader, who truly loved his Country — Also, a very tough negotiator on TRADE. His Election was very close and now, he is leading in the Polls. This is nothing more, or less, than an attack on a Political Opponent — Something I know much about!

President Trump then announces a 50% baseline tariff rate against Brazil.  This is a strategic gamble for President Trump in that Jair Bolsonaro is effectively banned from running in the next election, and leftist Lula da Silva could benefit from an increased surge in nationalistic sentiment similar to the Canada election.

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It’s the reverse rustbelt issue.  In order to retain their market share, Japanese automakers are slashing the prices of their export vehicles to the USA.  However, simultaneous with the anticipated drop in profits, the Japanese economists are worrying what impact this will have on autoworker wages.

Not accidentally this is exactly the problem U.S. workers suffered through during the era of offshoring our manufacturing. Apparently, Japan is heading into the dynamic the U.S. rustbelt previously suffered.  Imagine that.

The Straits Times – TOKYO – Japan’s automakers slashed the price of products exported to the United States at record pace, in a sign that companies are sacrificing profits to remain competitive as President Donald Trump’s tariffs hit cars.

In June, the export price index for vehicles shipped to North America plunged 19.4 per cent from a year earlier on a contract currency basis, the biggest drop in records going back to 2016, according to the Bank of Japan’s (BOJ) corporate goods price report on July 10.

The data adds to signs that Japanese automakers are trying to avoid a major price increase to remain competitive in the US, even after Mr Trump began to impose 25 per cent auto tariffs in early April. The flip side of the move is it raises concerns over companies’ profitability and whether they can continue to keep raising wages – a key component of the Bank of Japan’s sustainable inflation goal.

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Announcement from Secretary of Agriculture, Brooke Rollins: “I have ordered an immediate shutdown of live cattle, bison, and horse trade through the southern U.S.–Mexico border. This decisive action comes after Mexico confirmed another case of New World Screwworm in Veracruz.”

(Washington, D.C., July 9, 2025)– Yesterday, Mexico’s National Service of Agro-Alimentary Health, Safety, and Quality (SENASICA) reported a new case of New World Screwworm (NWS) in Ixhuatlan de Madero, Veracruz in Mexico, which is approximately 160 miles northward of the current sterile fly dispersal grid, on the eastern side of the country and 370 miles south of the U.S./Mexico border.

This new northward detection comes approximately two months after northern detections were reported in Oaxaca and Veracruz, less than 700 miles away from the U.S. border, which triggered the closure of our ports to Mexican cattle, bison, and horses on May 11, 2025.

[…] Therefore, in order to protect American livestock and our nation’s food supply, Secretary Rollins has ordered the closure of livestock trade through southern ports of entry effective immediately. (read more)

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The Term-1 effect of deflation created by tariff policy is resurfacing in Term-2 even with larger tariff impacts across the network of global manufacturing exports. [DATA SOURCE]

In essence, there is little to no end result in price increases in the final price of consumer goods (Consumer Price Index). In fact, there is a slight deflationary aspect on CPI data from imported durable goods.  The lower price of arriving imported durable goods is effectively putting downward pressure on US consumer prices.   This is identical to the Term-1 result. A pattern is repeating.   [PCE personal consumption expenditure / CPI consumer price index]

[Source – WH Council of Economic Advisors]

It sounds counterintuitive, but tariffs do not impact the final price of goods to USA consumers; there are just too many factors, too many elements within the Total Cost of Goods (TCG) within supply chain.  Global energy prices, domestic energy prices, currency evaluations and fluctuations, state/govt subsidies to manufacturers, labor negotiations and production profit offsets are only a few of the components.

Additionally, and this is where U.S. consumers do not get a fulsome explanation from corporate media analysts, the tariff rate is applied to the ‘cost’ the exporter pays, not the final consumer price.  A pair of jeans from China may be sold to the import company for $5 per pair. A 30% tariff raises the price of the jeans by $1.50 to $6.50.  The tariff rate does not apply to the retail price of $50 paid by the consumer.

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President Donald Trump has begun posting the country specific tariff rate announcements on his Truth Social account.

Beginning with Japan and South Korea, President Trump is sending letters to each nation not currently in direct negotiations with the USA.  Japan example below:

Both Japan and South Korea are assigned 25% baseline tariff rates “separate from all Sectoral Tariffs.”  Additionally, if the nation participates in transnational shipping, the rate attempting to be avoided will be applied to the country violating the trade position.

Example:  South Korea (25%) acts as a passthrough for a country with a higher tariff rate like Vietnam, 40%.  If South Korea is caught engaging in transnational shipping then the applied tariff rate on the South Korean goods is 40%.

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White House Trade and Manufacturing Advisor Peter Navarro talks about how the Fed monetary position is lagging with the intent of Trump’s MAGAnomic policy.  In the short review, Chairman Jerome Powell is approximately 0.50% in rate cuts behind the growth plan of President Trump.

Peter Navarro notes this disconnect is politically motivated when viewed through the window of hindsight.  Navarro is correct.   CTH has been outlining this economic policy and monetary policy disconnect, specifically as it pertains to President Trump’s Main Street focused agenda, for almost a decade {GO DEEP}.

Additionally, in many ways the Trump tariffs are the reverse of decades of ‘exfiltration’ of American wealth. Just as there was a shift when the value of the Wall Street economy surpassed the value of the U.S. Main Street economy, the politicians began responding to their new donors, so too is the Fed reluctant in reverse focus and advance the agenda of Main Street.  WATCH:

Here’s the key – The DC challenges are not overwhelming when you take a non-traditional approach toward finding solutions.

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Appearing on CNBC to explain the big picture economics, Treasury Secretary Scott Bessent outlines how debt and deficit hawks are seemingly blind to the need for GDP growth to deal with federal spending.

From the outset of President Trump’s MAGAnomic policies in his T-1 and T-2 platform, growing the U.S. economy, expanding the size of the GDP is a key facet to dealing with debt and deficits.  President Trump has always promoted economic policy that expands the size of the pie rather than focus on making smaller portions of each spending slice.

Secretary Bessent also explains the current status of the tariffs as delivered by the Trump administration.  The next few days are exceptionally busy with incoming requests to renegotiate trade terms, and avoid countervailing duties.  WATCH:

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Big picture:  Trump, Lutnick and Greer are now transmitting 1. Baseline tariffs (10-20%), 2. Reciprocity tariffs (trade imbalance) and 3. Section 232 tariffs (ex. Steel and Aluminum).  Countries are notified and their tariff rate begins on August 1st.

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President Trump and Commerce Secretary Howard Lutnick hold an impromptu press conference before departing Bedminster, New Jersey en route to the White House.

Topics included the devastating flood in Texas, Elon Musk creating a third party, the ongoing trade negotiations and pending tariffs, President Trump’s conversations with both Vladimir Putin and Volodymyr Zelenskyy as well as the upcoming visit of Benjamin Netanyahu to the White House on Monday.

As noted by Secretary Lutnick the new tariff rates go into effect August 1st.  WATCH:

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White House National Economic Chairman, Kevin Hassett, discusses the current status of the ongoing trade negotiations as the deadline for engagement windows is scheduled to close on July 9th.

As outlined by Kevin Hassett, we can expect those nations who are not in current negotiations will receive letters from President Trump letting them know that the baseline tariff rate (10%) and reciprocity rate (unknown) will be.  Large nations like India and China are currently in negotiations.  The EU collective has preliminary contact information, and a few others are in close proximity to Free Trade Agreement closure.

With the Big Beautiful Bill passed, in combination with baseline and reciprocal tariffs, the revenues to grow the GDP are in place to expand the overall U.S. economy.  WATCH:

[Transcript] – WEIJA JIANG: We turn now to Kevin Hassett. He is the director of the National Economic Council and one of President Trump’s top advisors. He’s also very popular on that driveway where I’m usually alongside about a dozen reporters. So, Kevin, thank you so much for your time this morning. I want to start with trade, because there’s a big deadline coming up on Wednesday. As you know, that 90-day pause on reciprocal tariffs that the President announced back in April is set to end. So far, the US has announced a few deals; the UK, Vietnam, and you’re inching closer to a final agreement with China. Do you expect to get any more deals done with America’s biggest trading partners by Wednesday?

KEVIN HASSETT: Yeah. First, I do have to take- take a pause and share your thoughts and prayers with the people of Texas. It’s an incredible, heartbreaking story, and Kristi Noem and the President have instructed the federal government to throw everything they’ve got at helping the survivors and helping clean up that place. So, anyway, I’m really heartbroken today to see these stories, and I want you to know that in the White House, everybody is putting every effort they can into helping the people of Texas today.

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The intransigent European Union is hitting a dead end with immovable Trump on the issue of tariffs.  The resulting dynamic is what we would expect given 75 years of the Marshall Plan (European Recovery Plan) as part of the EU’s only point of reference.

In order for the EU to maintain its socialistic form of government, it needs to continue the economic benefits from one-way tariffs that exploits the American consumer market.  President Trump’s plan to force reciprocity is against its entire economic foundation.  The EU simply cannot fathom life without the status quo.

In many ways the EU is in the same position as Canada. From its perspective, economic reciprocity is not sustainable; it would have to change its social compacts. This is the core of the conflict.

The EU trade delegation hit a brick wall in Washington DC, as the U.S. trade team reiterated the baseline tariffs are not something within the negotiation dynamic.

BRUSSELS — The European Union is weighing a provisional trade deal with the United States that would maintain a 10 percent tariff on most exports, the European Commission told EU ambassadors on Friday.

The EU executive reported back after a crucial round of talks in Washington on Thursday, in which Trade Commissioner Maroš Šefčovič sought to head off a threat by President Donald Trump to impose a 50 percent tariff on all European goods from July 9 if no deal is reached.

In addition to the baseline tariff, conversations would continue on providing relief to specific industry sectors such as cars, two national officials cited top Commission officials as saying.

The outcome fell short of expectations in European capitals after the Commission’s trade negotiating team had previously said the possibility of “up-front” tariff relief for some industries was under consideration. The U.S. levies 25 percent tariffs on cars and 50 percent on steel and aluminum. (read more)

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