7/3/2025
July 9 Tariff Deadline Looms
Trump’s tariffs have not increased inflation
Clay Travis & Buck Sexton Radio Show
The tariffs have not increased inflation because they have yet to go into effect. After the disastrous March – April plunge in the stock market, someone convinced Trump to do something. He instituted a 90-day freeze on imposing double digit tariffs. That deadline arrives July 9.
Despite now claiming a deal with Viet Nam and India, to date only the United Kingdom has signed a trade deal. And the US had a positive balance of trade with the UK. The ninety deals in ninety days was always a pipe dream. I have no idea what Trump plans for July 10 and worse, he probably does not either. But a serious study is out on the subject.
J P Morgan Chase suggests that business with $ 10m to $ 1 B in revenue will be most impacted. These are more dependent on imports from China, India, and Thailand. This is about one-third of the business in the US. Chase puts the cost at $82 B for these companies. The big box stores like Costco and Amazon have delayed price increases by building inventory before July 9. Sure looks like a reckoning ahead to me.
Meanwhile, Congress passes the big, beautiful bill apparently raising total debt to $40 trillion. Interest on tat debt is now a trillion dollars a year. We depend on those outside the US to continue buying our IOUs. Will they do so?
I constructed a chart of the US Dollar and West Texas Intermediate oil prices. Oddly both fell from January 2025. But that changed in May. Crude oil began to soar from the low of $58. It spiked on the Iran bombing and then pulled back. But this week oil had jumped a couple of dollars to $67.11. The Dollar however has continued to fall. This year the Dollar Index has fallen from 110 to 97. Oil is priced internationally in Dollars. When the Dollar falls, oil prices rise to maintain value. If one is buying US debt in dollars outside the US, one is getting repaid in smaller dollars. In the last six months alone that would be 10% less. How long will other countries be willing to do this?
Everyone loves the stock market when it makes a new high. And right on time, a New York Congressman will introduce a bill. The bill gives corporations a tax break for distributing their stock to the lowest paid 80% of their workers. This reminds me of the Seinfeld TV stars demanding GE stock as the market topped in 2000. GE was eventually kicked out of the Dow 30.
Consider taking some stock off the table and buying Treasury bills. I expect higher interest rates a year from now.