Group 1 - The article discusses the recent increase in tariffs announced by Trump for 14 countries, effective August 1, which is close to the reciprocal tariffs from early April [1][14] - As of May, the average tariff rate in the U.S. was 7.4%, with specific rates for countries such as China (38.6%), Japan (9.3%), and the UK (6.2%) [2][15] - The U.S. may adopt a strategy of sending tariff increase notifications in batches to exert targeted pressure during negotiations [2][15] Group 2 - Trade negotiations between the U.S. and Japan have reached a stalemate, particularly over issues related to automobile tariffs, while discussions with Mexico are nearing an agreement [3][16] - The EU aims for a limited framework agreement with the U.S., maintaining a 10% baseline tariff but seeking reductions in tariffs on specific products [3][16] - If all tariffs take effect on August 1, the simple average tariff rate for the U.S. on these 14 countries will rise to 29%, only 4 percentage points lower than the initial reciprocal tariff rate of 33% [5][18] Group 3 - Trump's tariff strategy aims to achieve three goals: industrial protection, addressing twin deficits, and leveraging diplomacy, which may create internal contradictions [4][17] - The concept of reciprocal tariffs is viewed as discriminatory, with trade deficit size being a key consideration for determining baseline tariff levels [4][17] - Approximately 100 economies with smaller trade surpluses with the U.S. may face a 10% tariff, while 18 countries could see higher tariffs ranging from 20% to 70% if no agreements are reached [5][17]

Tariff Changes - On July 7, Trump announced an increase in tariffs for 14 countries, effective August 1, with rates close to the reciprocal tariffs from April[2] - As of May, the average tariff rate in the U.S. was 7.4%, with specific rates of 38.6% on China, 9.3% on Japan, and 6.2% on the UK[3] - If all tariffs take effect on August 1, the simple average tariff rate for the 14 countries will rise to 29%, only 4 percentage points lower than the initial reciprocal tariff rate of 33%[5] Trade Negotiations - U.S.-Japan trade talks are at an impasse, particularly over auto tariffs, with Japan seeking to eliminate a 25% tariff[4] - The EU has proposed a retaliatory tariff plan of €210 billion if no agreement is reached by July 14, while the U.S. insists on a 25% auto tariff[4] - The U.S. and Mexico are nearing an agreement to eliminate steel and aluminum tariffs, with negotiations ongoing[4] Economic Implications - The U.S. aims to achieve three goals through tariffs: industrial protection, reducing trade deficits, and leveraging diplomacy, which may create internal conflicts[4] - The trade deficit remains a key consideration for tariff levels, with around 100 countries facing a 10% tariff, accounting for about 5% of the U.S. trade deficit[5] - The U.S. economy shows signs of slowing, with unemployment potentially rising to 4.4-4.6%, necessitating close monitoring of tariff impacts[5] Risks - Potential escalation of geopolitical conflicts could disrupt global economic stability and inflation control efforts[7] - There is a risk of the U.S. economy slowing more than expected, particularly in employment and consumer spending[7] - The Federal Reserve may adopt a more hawkish stance if inflation remains resilient, affecting future interest rate decisions[7]

Tariff Overview - As of May, the average tariff rate in the U.S. is 7.4%, with specific rates of 38.6% on China, 9.3% on Japan, and 6.2% on the UK[2] - The new tariffs on 14 countries will take effect on August 1, with an expected average tariff rate of 29%, only 4 percentage points lower than the initial rate of 33% set on April 2[5][10] Trade Negotiations - U.S.-Japan trade talks are at an impasse, particularly over auto tariffs, with Japan seeking to eliminate a 25% tariff[3] - The U.S. and Mexico are nearing an agreement to eliminate steel and aluminum tariffs, while negotiations with Canada are ongoing with a deadline set for July 21[3] Tariff Strategy - Trump is shifting to a "discriminatory tariff" framework, potentially grouping countries for tariff adjustments based on trade deficits and negotiation outcomes[2][4] - Approximately 100 countries with small trade surpluses with the U.S. may face a 10% tariff, while 18 countries could see tariffs ranging from 20% to 70% depending on negotiations[4] Economic Impact - The tariffs are expected to have significant effects on the U.S. economy, with concerns about rising unemployment rates projected to reach 4.4-4.6%[5] - The structural slowdown in the U.S. economy remains a concern despite recent positive non-farm payroll data[5] Risk Factors - Potential escalation of geopolitical conflicts could disrupt global economic stability and inflation control efforts[12] - A sharper-than-expected slowdown in the U.S. economy and a more hawkish stance from the Federal Reserve could impact future monetary policy[12]