Back on the tariff roller coaster: Trump imposes new levies, extends deadlines

After a few months of relative calm, President Donald Trump issued a flurry of new tariffs on key trade partners while indicating an extension of deadlines for most countries to reach a trade deal with the U.S..

Trump paused his new global tariff regime less than a week after it was announced on April 2, pushing their effective date to July 9. On Monday, he said he will extend the pause again, this time to Aug. 1. 

He also said Monday that he will impose a 25% tariff on Japan and South Korea, a 30% tariff on South Africa, and new rates for Myanmar, Laos, Kazakhstan and Malaysia, all effective Aug. 1. The rates on Myanmar, Laos and Kazakhstan are lower than the ones announced April 2.

Given that Trump has taken new steps this week ahead of the original deadline, he may continue to issue new measures throughout the week.

Despite the daunting self-imposed deadline to reach deals with practically every country in the world, the Trump administration expressed optimism for getting most trade deals done by Wednesday. Treasury Secretary Scott Bessent also indicated he expects many announcements “in the next 48 hours.”

Another development is that threatened countries that are “aligning themselves” with so-called “BRICS” nations will face an additional 10% tariff. BRICS countries include Brazil, Russia, India, China and South Africa.

Global stock markets tanked on the news about Japan and South Korea, echoing the aftermath of Trump’s April 2 announcement on tariffs on practically every country in the world. Some of those rates were astronomical.

There has been good news on the tariff front, at least as it relates to policy certainty.

The U.S. announced last week that it has come to a trade agreement with Vietnam, which will impose a 20% tariff on a key trade partner for homebuilders. But details were limited and it’s unclear whether that deal is finalized. In June, Trump came to an agreement with the United Kingdom, although details of that deal are also scant.

The president also indicated that trade talks with Canada have resumed after a brief pause, with the hope of reaching an agreement by July 21.

Trump’s ever-shifting statements on trade policy have major implications for the housing industry. Homebuilders rely on many of the countries that have either been threatened with tariffs or have already had them imposed.

China provides homebuilders with a number of key goods, particularly appliances. Trump and Chinese President Xi Jinping have engaged in a tit-for-tat tariff battle that at one point pushed the American tariff on China to 145%. That figure has since been lowered to 10% but is only set to last until Aug. 12.

The trade war has also had a negative impact on mortgage rates. After the April 2 announcement, rates popped back up to 7%. Rates for 30-year conforming loans have since fallen to 6.87%, but that’s still above the recent low point of 6.69% in mid-April.

Federal Reserve Chair Jerome Powell also stated publicly that Trump’s trade war is making him hesitant to cut interest rates, given that tariffs are generally considered to be inflationary. The Trump administration has responded by calling for his resignation and for Congress to investigate him.