Trump’s Tariffs Are Back — And Crazier Than Ever

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**Ed Elson** (2:09)
Welcome to Prof G Markets. I'm Ed Elson. It is July 22nd. Let's check in on yesterday's market vitals. The major indices climbed as chip stocks rallied. Intel popped nearly 9% after the company announced it is reducing its headcount. Meanwhile, Brent crude climbed as strikes continued in the Middle East and President Trump dismissed the idea of immediate talks with Iran. The yield on 10-year treasuries rose to its highest level in two months on inflation expectations. On Cauchy, the odds of a rate hike before 2027 hit 62%.
Okay, what else is happening? Just when you thought it was over, tariff chaos is back with a vengeance. Trump announced that the US would be imposing 50% tariffs on most Canadian goods next month, claiming that Canada had discriminated against US industries. Prime Minister Mark Carney said that he and Trump would accelerate trade talks before they take effect. Meanwhile, a 25% tariff on certain imports from Brazil takes effect today. And on Friday, the 10% tariffs the Trump administration imposed in February are due to expire. US Trade Representative Jameson Greer said, quote, We expect to see some action soon as the administration prepares a new round of replacement tariffs. So lots of tariff news to get into here. Joining us to discuss this news, we are speaking with Peter Harrell, visiting scholar at the Institute of International Economic Law at Georgetown Law School. Peter, welcome back to the show. It's great to see you.
Lots has happened here on the tariff front. It's a subject that we talked a lot about last year. Stopped talking about for a while, I guess because other stuff was happening. Now we're back to talking about it.
What's happened with tariffs over the past six months?

**Peter Harrell** (4:11)
Yeah, well, I think part of why we stopped talking about it was we all hoped that maybe although Trump would maintain high tariffs, he'd do so in a more orderly and disciplined fashion than he did last year. As we're seeing this week, that's not really the case.
If you go back to February, Trump lost a case at the Supreme Court where the Supreme Court ruled that the legal basis he'd been using for many of his tariffs last year was illegal. And the Trump administration pivoted back in February to kind of a phased set of fallback tariff plans, with the idea being first, they'd have what's called a Section 122 tariff, which would be in place from late February until Friday morning here in the East Coast of the United States. And then they would have something called a 301 tariff that would come into place to kind of replace the 122 Friday morning as well. So they'd kind of pictured an orderly process. That's not where we are. Like although they'd signaled there'd be order, what we in fact have seen is the 122 is going to expire Friday morning. They've not yet finalized the successor tariff, the 301 tariff. Maybe they'll do that today. Maybe they'll do that tomorrow.
So if you are importing a product into the United States today from Asia or from Europe, you don't know what tariff rate you're going to pay on Friday at this point. So that's kind of chaotic data point number one. Chaotic data point number two is that Trump decided, as you said, Ed, yesterday that he wanted to impose 50% tariffs on tens of billions of dollars of US imports from Canada, which is sort of allegedly over Canadian discrimination against the United States, using literally a provision of the Smoot-Hawley Tariff Act that may or may not still be on the books. Obviously, a piece of this is that he's trying to negotiate with Canada over a trade deal and he wants to put pressure on Canada. But that's sort of chaotic piece number two. And then chaotic piece number three, as you say, is we have these tariffs on Brazil, which are kind of around the fact that Trump doesn't like Brazilian tech regulation and he also doesn't like their online payment platform. And so he's threatening, he's imposing tariffs on them as well. And, you know, probably more to come the way this is going.