How many more “tacoa” can the US economy take to crazy?

The White House tariffs have received good reviews. Donald Trump Last week, NBC News’s Kristen Welker said the stock market had just reached a new high. Trump is right about the market, but he doesn’t mention why investors will S.&P. The 500 and Nasdaq bid to unprecedented levels, and despite his threatening again, he still imposes a punitive tariff of up to 50% on goods imported from around the world: they don’t believe he will experience it. Or, as the acronym for Wall Street faith articles,Tacos” – Trump is always chicken.

Trump’s first global tariff announcement Great fanfareIn the Rose Garden on April 2, the value of stocks, bonds and the dollar plummeted. Within a week, he announced three months of punitive tax pauses for three months, up to 50%. Trump’s adviser Peter Navarro said the administration will use a 90-day extension to reach 90 new trade deals. At the end of last week, two deals were concluded with the UK and Vietnam, and those deals were just a rough overview. Instead of letting the tariffs start, Trump postponed them again, this time on August 1. He also told reporters that the new deadline may be “not a one hundred percentage point company.” Tacos,,,,, Tacos,,,,, Tacos. At least that’s what Wall Street thinks.

“I don’t care about tariffs anymore,” HSBC investment strategist Max Kettner, Tell this Financial Times last week. “What is stopping them from saying it, let’s give it another three months?”

Wall Street’s cynicism is understandable. But the prospect is reassuring from the perspective of elsewhere in the U.S. economy, especially direct involvement in international trade. Trump has not backed off all relevant taxes. Now, almost all foreign-made goods are now taxed at 10%. The minimum tariff rate for items from China is 30%, which is certainly higher if both sides cannot finalize a trade agreement, which appears to have agreed in May. The Treasury Department said Friday that revenue from tariffs jumped to $27.2 billion last month, bringing the total in the fiscal year to more than $13 billion so far.

Trump has then introduced or proposed industry-by-industry tariffs, such as 25% tax on automobiles and auto parts and 50% tax on steel and aluminum. Last week, he announced a 50% tax on copper, a metal used to produce power lines, water pipes, roofs, circuits, refrigerators, data centers, electric vehicle batteries, and more. In the U.S. futures market, copper prices rose to record prices in the coming months. Companies that manufacture or sell copper products are about to see a significant increase in their costs, and many other companies that import parts or finished products will also increase significantly.

In Trump’s latest Salvos, in letters to various countries and groups, threatening to impose a 30% tariff on items in Mexico and the EU, and a 50% levy on goods from Brazil, is a punishment for countries with which the United States operates a trade surplus, a government punishment for its former leaders and has been accused of the European government’s government’s government agencies, Jair Bololsonor, jair Bololsonor and the Bround. But even though Trump’s latest threat proved empty, the average effective tariff rate at the end of the Biden administration rose from 2.4% to 15.8%, according to Yale’s Budget Laboratory. This is the highest since the Great Depression. If Trump’s threat does come into effect on August 1, the budget lab will increase its effectiveness to 18%.

So far, higher tariffs have not shown the economic price index within the range. This is partly because many U.S. businesses have ordered additional inventory that could be levied before Trump’s policy takes effect. Similarly, some companies seem to absorb some additional costs in lower profit margins rather than passing it on to consumers, but economists and business executives warn that this approach is unlikely to last. Last week, Hasbro’s CEO sold many toys produced in Asia and Latin America, and he said prices could rise in the fall.

“I think even if the macro data does not reflect the macro data yet, it does not reflect that,” Michael Wolf, an economist at Deloitte Touche Tohmatsu Limited, a global professional services company, told me. “It’s not surprising in a sense. I wouldn’t expect the company to pass the higher costs right away. But as time goes by, as inventory goes by, it’s only so long that you can stick with it.” Ian Shepherdson, chairman of Macroeconomics, agreed. “People are anxious to have a trial too early,” he said in an email. When Trump raised tariffs in 2018, Shepherdson continued, and it took three months to start rising, and the process took several more months to fully work in the economy. “Someone has to pay tariffs, and there aren’t many signs that U.S. exporters are carrying canned food,” Shepherdson added.

Even if the stock market is largely undisturbed (the prices did drop on Friday), the chaotic rollout of tariffs has greatly increased economic uncertainty and deprived Trump of some of the momentum of the economy inherit Biden gives the drug. after Coronavirus-19 pandemic, the recovery of the U.S. economy is stronger than other advanced economies. In 2023 and 2024, inflation-adjusted GDP annually rates were 2.9% and 2.8% respectively. Since then, growth has weakened significantly.

In the first quarter of 2025, GDP growth was slightly negative as consumer spending weakened, and imports soared as businesses restricted tariffs. (Imports do not increase GDP, it can measure goods and services produced in the U.S.). The Department of Commerce’s preliminary report on GDP in the second quarter, which will be released on July 30, appears to show in the Atlanta Federal Reserve’s GDPNow model, showing an annual growth of 2.6% on an annual basis, which constitutes a broad economic statistics. Even if this prediction turns out to be correct, the economy will be lagging behind in the first half of the year. Trump’s focus on tariffs will be largely blamed.

What happens from here? Economic forecasts are often unreliable, but they can be useful for looking at different situations. In Deloitte’s latest forecast published last month, the baseline case assumes an average tariff rate of about 15%, while the Fed lowers interest rates for several months. GDP grew 1.4% in 2025, only half of last year’s rate. In 2026, growth maintained depression at 1.5%, with the unemployment rate at a margin of 4.6%. (4.1% last month.)

The forecast also sees a more optimistic situation where trade tensions ease, transactions are completed, and the average tariff rate drops to 7.5% from December to December. In this case, growth is only 1.8% this year, but next year it will be 2.9% and the unemployment rate remains around 4%. Finally, Wolf and his colleagues looked at a more pessimistic case where trade collapsed with China, the EU and other countries, and effective tariff rates rose to 25%. The bond market reacted negatively to these developments, with long-term interest rates raising mortgage and other loan costs, responding to these developments. The economy is in recession, with GDP falling by 1.6% next year and unemployment rate rising to 5.7%.

We can mark these scenarios as bad, better than expected and disastrous. Which one is most similar to reality ultimately depends on whether Trump is actually Tacos Men or tariff person. But, anyway, even the optimistic man, his efforts to run a global economic superpower are like it is a major beachfront hotel (must be in trouble if you want to get in touch with it) have done a lot of unnecessary harm. Just don’t try to explain to him. You’ll waste time. ♦