6: India

The Tariff Effect: Billions in Revenue but No Economic Earthquake Six months into the experiment, with more tariff announcements likely in the coming days, the economy hasn’t crashed. Inflation has ticked up but not soared. Consumers aren’t finding empty shelves. .......... New data Tuesday showed the trade deficit narrowing in June, to the lowest level since September 2023. Economists said that appeared to be mostly a reversal of the huge import surge before tariffs hit, rather than a sign of a sustained downward trend in the trade deficit. .......... Companies aren’t broadly rushing to reshore, partly because the chaotic and ever-changing tariff policy has paralyzed decision-making. ........... Trump’s actions so far have raised the effective average tariff rate on all imported goods to roughly 18%, from 2.3% last year. Those are the highest levels since the 1930s. ........ A trade truce with China is set to expire Aug. 12, and another with Mexico expires in October. ......... Economists expect the higher tariffs to inflict damage by pushing inflation higher and contributing to a slowdown in economic growth.

GDP rose at a 1.2% annualized pace in the first half of the year, versus 2.5% last year.

............... One reason consumers haven’t felt more price pressure: Many U.S. companies for now are absorbing the extra tariff costs because they are reluctant to lose customers by hiking their prices until they absolutely must. ........... Most economists expect companies eventually to pass more of the cost along to consumers. ......... If tariffs on most major trading partners end up between 10% and 15%, Cavallo expects prices of imported goods to gradually rise another 3% to 4% by the end of the year. ......... Trump has suggested that the extra revenue can replace income tax for many Americans, particularly those earning under $200,000, but the math doesn’t add up. In 2022, for instance, the bottom 90% of households—those with adjusted gross incomes below about $179,000—paid about $600 billion in individual income taxes. ........... tariffs as they currently stand are also unlikely to alter the trade deficit much, because exports will likely fall at the same time imports do .......... Some 57% disapprove of how Trump is handling tariffs, 17 points higher than the share of voters who approve. The survey also finds that 55% of voters disapprove of Trump’s handling of inflation, outweighing approval by 11 percentage points. ......... “The number one issue for American families is the need to lower costs,” said Rep. Suzan DelBene (D., Wash.), head of the Democrats’ campaign arm. “That was the issue last election, and it’s the issue right now.”

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'Logistical nightmare' awaits Trump if his tariff promises fall apart: report Donald Trump has staked a great part of his second shot at making America great again on promises that his tariff war will flood the U.S. Treasury with money and ease American consumers' suffering. ............ That could all fall apart if a federal appeals court and then the Supreme Court rule that he has usurped authority from Congress. The government would then have to refund affected parties, something that would be hard to unwind. ...........

a Trump loss in the courts will set off a 'logistical nightmare" when it comes to claims, who gets them, and how fast.

.......... the president shouldn't be surprised if it all goes south, according to experts in his own Department of Justice. ......... if the tariffs were ruled unlawful, importers would be entitled to refunds, which Customs and Border Protection would likely process through standard administrative procedures ........ "The scenario is already alarming some Trump allies who strongly support his tariff policies, but also are pessimistic that the duties the administration imposed under emergency law will survive the Supreme Court." ........... The report notes that it could be a long time before companies will see refunds if the Supreme Court rules against the administration, and even then, they will likely have to pay out of pocket for trade lawyers to assist them. ........ "That could add up to a sizable sum the administration would have to figure out how to repay. It’s not clear what portion of the tariff revenue comes from the duties imposed on trading partners under emergency law, and how much has been produced by the tariffs on specific sectors, like cars. But combined, it exceeded $150 billion at the end of July, according to Treasury Department data. That’s nearly double the $78 billion netted over the same period last fiscal year."

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