Trump Broadens Tariff Strategy with Dual Tracks

The Trump administration is expanding tariffs on two fronts: broad national security measures under Section 232 and country-specific deals tied to a July 9 deadline.

Section 232 Tariffs Expand to More Sectors

The Commerce Department is preparing to announce new tariffs under Section 232, targeting sectors considered vital to national security:

• New sectors: Semiconductors, pharmaceuticals, and critical minerals.
• New products already added: Dishwashers, dryers, washing machines.
• Existing tariffs: Steel and aluminum, now at 50%.

“These 232 actions are very likely going to result in import restrictions on almost every good entering the U.S.,” said Nazak Nikakhtar, a former Commerce official.

Jason Miller, a professor at Michigan State, said that this round of Section 232 tariffs appears "broader" and potentially more "inflationary" than in 2018. While earlier actions focused on upstream metals, current measures include finished consumer goods like kitchenware and metal furniture.

July 9 Trade Deal Deadline Approaches

At the same time, the U.S. is pushing countries to sign bilateral trade deals or face steep tariffs:

• 10% baseline tariff on all Chinese goods
• Additional 20% on goods tied to fentanyl precursors
• 25% tariffs under Section 301 for IP violations
• Only the U.K. has signed a deal so far

Countries like Japan and Canada may get deadline extensions. Others, like the EU and India, risk 50% tariffs. China and the EU are preparing retaliatory measures, including 25% tariffs on U.S. soybeans and whiskey.

Economic and Legal Fallout

• Federal Reserve: Holding rates steady amid tariff-driven inflation concerns.
• Inflation: Tariffs could raise prices by 3–5%.
• Trade deficit: Hit $200 billion in Q2.
• GDP impact: Projected 0.5–1% drop by 2026.

Meanwhile, a coalition of retailers and manufacturers is challenging the president’s authority in court. A bipartisan Senate bill seeks to limit presidential tariff powers under the IEEPA.

Nearshoring Picks Up

To avoid tariffs, companies are shifting supply chains:

• Mexico: 165% surge in foreign investment in Q1 2025, especially in automotive and electronics.
• Reason: Proximity to U.S. markets and tariff avoidance.

Source: Transport Topics | FreightWaves