President Donald Trump unveiled a barrage of new tariffs, including new 35% levies on Canada that took effect Friday, the day of the White House’s self-imposed deadline to reach trade deals.
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The raft of announcements released by the White House late Thursday was followed by weak jobs data released Friday morning, which together led to a major stock selloff and a drop in bond yields as investors shift their bets more toward future interest rate cuts from the Federal Reserve.
The new tariffs that went into effect overnight include an increase on all Canadian imports to 35% from 25% and an additional 50% tax on imported semifinished copper products. At the same time, the president released updated reciprocal tariff rates for dozens of countries but delayed their imposition from Friday to Aug. 7.
The orders ramp up Trump’s trade war with some of the country's closest trading partners while simultaneously redrawing the global trade map.
Eswar Prasad, a professor of trade policy at Cornell University, told The New York Times the decisions marked “a dark day in the annals of global trade integration.”
“Trump has decisively and irrevocably taken the hammer to the global rules-based trading system,” he said.
The executive orders target 67 countries, the European Union and Taiwan with tariffs ranging from 10% to 41%. Countries that aren’t explicitly named will be subject to a baseline 10% tariff, all set to take effect Aug. 7.
The orders don’t cover China or Mexico, both of which are negotiating trade deals with the U.S. The EU, South Korea and Japan are set to face a 15% tariff rate, while the UK will keep the 10% rate it had previously negotiated.
In a Friday morning post to his social media platform, Truth Social, Trump said that tariffs were bringing in billions of dollars to the U.S. while criticizing Fed Chair Jerome Powell for not cutting interest rates during the Federal Open Market Committee’s meeting this week.
It was unclear why Trump extended the effective date of the tariffs by a week — and it is possible he could delay their implementation again — but the last-minute wave of announcements sowed confusion among international business leaders, who were unsure Thursday night if they would be paying a higher rate Friday morning, the NYT reported.
Data released Friday by the Bureau of Labor Statistics showed the country added just 73,000 jobs in July and included deep revisions downward of the job growth numbers from the previous two months. In all, the BLS said 818,000 fewer jobs were created over the last year than previously reported.
U.S. stock indexes were down as much as 2% Friday morning, and the yield on 10-year Treasury bonds was down 12 basis points, a relatively large swing for the index and a sign that investors are shifting toward a more bullish view on future rate cuts from the Fed.
As of Friday morning, 81.4% of investors expect the Fed to cut rates by 25 basis points at its next meeting in two months, according to CME Group’s FedWatch tool.
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