Trump’s economic reality bites and protective commercial policies
George Riquelis defines the negotiations of the Capital Ball Trade: During the long and arduous talks on the conditions in which Britain will leave the European Union, he was a consultant to Michel Barnier, the European Union’s chief negotiator. Once again in April, when Riquelis saw that President Donald Trump issued an order, he was subsequently suspended, and a 20 percent comprehensive tariff imposed on European Union exports to the United States, had a clear vision on how to respond to Europeans: by threatening huge fees on US exports to Europe. This was what China did, and it seems that the other major trading partners in America will join Trump to decline. “What was required is for the European Union negotiators to prepare a wide retaliatory package.”
The European Union has fell by imposing huge duties on some famous American goods, including motorcycles, Kentucky Bourbon and Harley Davidson. Next, he threatened to expand the fees to American aircraft, auto parts and some other products. However, in the end, she adhered to the threat of Trump’s customs tariffs and calling the new European Union tool, a political tool presented in 2023 to deal with external economic pressure, which would have enabled it to target American banks and technical giants, such as Google and Meta, which have huge works in Europe. In reference to European Union leaders, including Ursula von der Lin, President of the European Commission, Riklis said, “They have never been unparalleled in a truly punitive package.”
At the beginning of this week, the White House announced a unilateral framework agreement as most European commodities that enter the United States will face a 15 % tax. This announcement said that the European Union agreed to cancel all definitions on American industrial goods, investing $ 100 billion in the United States, and increasing its purchases of American energy products and military equipment. “This is a somewhat catastrophic result – the surrender and insult everything in one,” said Reclists. “European Union leaders have not taken the full measure of Trump’s commercial policies and what is going on around him.”
In telling Trump, of course, his goal is to revive American manufacturing, reduce trade deficit, and increase revenues. Last month, given that the stock market reached new levels and some economic indicators suggest that the economy as a whole was amazingly escalating under its introductory attack, as he wrote on social media. “Fake news and the so -called” experts “were wrong again. The definitions make our country a” boom “.
A series of economic reports issued this week shows the vacuum of Trump’s claims. On Wednesday, the Ministry of Commerce issued numbers that show that during the first half of GDP growth in 2025, it slowed sharply compared to last year. The feverish efforts made by companies and consumers to the Trump tariff managed by the introduction through the request of foreign productive goods before in effect have distorted the semester GDP numbers, which show the economy that suffers from the annual contract by 0.5 percent from January to March, and a healthy growth rate appears between three percent and June. If you merge the numbers that must be corrected for deformities, they show the expansion of GDP at a rate of 1.3 percent over the past six months, compared to 2.8 percent in 2024. This is a significant decrease.
Given all the uncertainty resulting from the chaotic tariff program in the new tariff system for Trump, it is not surprising that employers think twice in employing workers. The official recruitment report for the month of June, which was released a month ago, showed a weakness in many private sector industries, but the comprehensive range of slow was not clear until the July report was issued on Friday. If we leave, regardless of the seasonal farm labor, employers have created seventy -three thousand new jobs last month, a smaller number of Wall Street he expected. But the real shock came in the revised estimated estimates for the month of May and June, which showed that the growth of jobs fell to less than twenty thousand each month. This is up to a default stop. Take the past three months as a whole, the growth of employment was weaker than it was in any similar period since Corona virus disease19 Core.
Trump’s initial response to the job report was to renew his attacks on the Federal Reserve, and its president, Jerome Powell, because he did not agree to demand a reduction in interest rates. “Powell Khatt”, he wrote in fact social immediately after the launch of the job characters. Later in the day, again on the social truth, Trump announced that he was shooting at the Labor Statistics Commissioner, which produces the monthly employment report. In another publication, he sought to justify this unprecedented step by claiming that the job numbers in July had been forged to make it and the other Republicans seem bad.
The fact is that BLS is working by statistics and other data experts, and many professional public employees, who are doing their best to produce accurate characters. Even according to his criteria, Trump’s efforts to find a compassionate scapegoat were. As for the Federal Reserve, which retained the fixed standard interest rate at a policy meeting earlier this week, it is not responsible for the fact that many companies respond to Trump’s definitions by stopping employment and starting to raise their prices. Another economic report issued this week showed the inflation rate, as it was seized by the preferred scale of the Federal Reserve, amounting to 2.6 percent in June, from 2.4 percent in May. This means that inflation is still higher than the goal of the Federal Reserve 2 percent, and indicates a possible return from the recession, as the price rises at the same time as the economy runs.
Sometimes, Trump and his economic advisers have suggested that it may be useful for the economy to suffer from some short -term pain in exchange for raising definitions and dropping the trade deficit, which has a total of four years of past five years more than three percent of GDP even though this argument makes it an easy meaning, as it is difficult to decline. “The data shows that there is no relationship between commercial balances and definitions.” Joseph Ghania, an economist at the Peterson Institute for International Economy, told me in Washington. Ghannis added that the Trump policy agenda “is based on a wrong hypothesis.” One of the ways that Trump’s tariff can reduce the trade deficit, which is the gap between exports and imports. However, if this happens, the narrowing of the gap will not have any relationship with the removal of foreign trade barriers: it will be because American consumers and companies have less money to spend on everything, including imported goods.
While the Americans are waiting nervously to see if this is the future that awaits them, many people in other countries deal with a world in which the US government has moved from a major guarantor of an open commercial system to operate what a global protection is mainly. “This is related to coercion and forced bargaining,” said Reclis. “The American administration follows an approach that does not take into account any rules, or prior obligations, but it depends on pure strength. You may be right. If you can get something by exercising pressure, then do that. If you are not ready to exercise counter -pressure, you will end up with weakness and intimidation.”
According to a series of executive orders signed by Trump this week, fees ranging from 10 percent to fifty percent will be imposed on goods from dozens of nations, starting next Thursday. Just expected, most of the Trump policies covering the main American trading partners, such as Canada, Mexico, Japan, India and the European Union, but the list of places whose products will be subjected to tariffs include Chad and Lezoto Poverty; Laos and Iraq, which are certainly sufficiently sufficiently sufficiently, will face a tariff of forty percent and thirty -five percent.