đ Recent Tariff Escalation & Agreements
In June 2025, President Trump announced a substantial trade agreement with China after negotiations in London and Geneva. The deal sets U.S. tariffs on Chinese goods at 55%âa combination of baseline, fentanyl-related, and prior dutiesâwhile China maintains its 10% tariff on U.S. imports . The U.S. also agreed to allow Chinese students and prioritize rare earth mineral supply from China. Meanwhile, the federal appeals court upheld the legality of these sweeping tariffs, keeping them in place pending further proceedings .
đ Economic Impacts & Reactions
Tariffs are having mixed economic effects. U.S. inflation remains moderate (2.4% in May) and employment is strongâwith 139,000 jobs addedâdue in part to firms stockpiling and shifting suppliers . However, some sectors are already feeling the pinch: toys, autos, and intermediate goods report price hikes, while steel and aluminum remain costly . The Congressional Budget Office projects the tariffs could bring in $2.8âŻtrillion in revenue over 10 years but at the cost of higher inflation and slowed economic growth . According to the Penn Wharton Budget Model, long-run GDP could decline by approximately 6% and real wages by 5% .
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đ Bottom Line
Trumpâs current tariff strategyâmarked by high rates, legal support, and targeted diplomatic dealsâhas introduced significant volatility. While near-term indicators like employment and inflation have remained resilient, structural concerns persist: slower growth, higher consumer prices, and ongoing legal uncertainty cloud the outlook. The eventual outcomes will hinge on how durable the recent U.S.âChina framework proves, especially amid upcoming deadlines (e.g., the July 8 pause on broad tariffs) and potential Congressional intervention.
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