President Donald Trump’s unpredictable approach to tariffs is once again under scrutiny as he extends the implementation of sweeping import taxes—this time setting a new deadline of August 1. The delay marks the second pause in a set of wide-ranging tariffs initially planned to take effect after a 90-day grace period. For economists and business leaders alike, the postponement highlights more than just indecision—it points to structural flaws in how the administration is reshaping global trade.
Rising Tariffs, Rising Costs
Despite temporary delays, the broader economic impact of Trump’s tariff policy is becoming clear. The average tariff on consumer goods in the U.S. now stands at roughly 17%, the highest level seen since the Great Depression. In June alone, American importers paid a record-breaking $28 billion in duties, a sharp increase from the $5–6 billion monthly average prior to the trade war.
This surge in import taxes—effectively a hidden sales tax—disproportionately affects lower- and middle-income households, who spend a greater share of their income on imported goods. While the administration has claimed that foreign exporters are absorbing the costs, the data shows otherwise: American businesses are footing the bill, and many are passing costs down the line to consumers.
Where Prices Are Rising
Although inflation data has not yet shown a dramatic tariff effect, that may soon change. Research teams from Harvard University and the Universidad de San Andrés have analyzed retailer pricing tied to product origin and found noticeable, albeit moderate, increases in the price of goods from countries facing U.S. tariffs—particularly those from China.
This trend is expected to intensify. As companies begin depleting the inventories they stockpiled ahead of tariff hikes, and as profit margins tighten, more of these costs will be reflected in consumer prices. Forecasts now suggest tariffs could raise the inflation rate by a full percentage point before the end of the year, pushing it above 3% at a time when affordability concerns remain high.
Consumer Confidence Wavers
One of the less-discussed effects of the tariff strategy has been its impact on consumer behavior. Inflation-adjusted spending has remained flat since Trump returned to office—an abrupt change from the growth trajectory seen during the previous administration. While employment remains relatively stable and wages are rising, experts point to widespread uncertainty about the economy as a key reason for the slowdown in consumer activity.
From unpredictable trade policy to immigration crackdowns and a deeply unpopular, deficit-heavy budget bill, the administration’s actions appear to be dampening what economist John Maynard Keynes once called “animal spirits”—the optimism that drives consumer and business activity.
Missed Opportunities for Clarity
Trump had two clear paths to resolve the confusion: commit to the tariffs and allow markets to adjust, or declare a symbolic victory and scale them back. Either route would have brought much-needed stability. Yet, instead, the White House has chosen to prolong the suspense, extending deadlines and fueling economic anxiety.
Industry leaders, such as Sue Spence of the Institute for Supply Management, have urged the administration to finalize trade agreements and allow businesses to plan accordingly. “Whatever deals there are going to be, let’s just ink it and move on,” Spence told Axios.
Chaos as a Tactic
So why does Trump continue this pattern of delay and disruption? Some analysts believe it’s a calculated political tactic. By constantly keeping both domestic and international players on edge, Trump maintains leverage—a dynamic he sees as central to his negotiating power. But in doing so, critics argue, he risks undermining the very economy he inherited in a strong position.
With the August 1 deadline approaching, skepticism remains high. Many question whether the tariffs will truly be enacted as planned, or if more extensions—and more economic turbulence—lie ahead.
