Topline
The months since President Donald Trump’s April “Liberation Day” tariff announcement have been defined by constant reversals over how the White House is handling its signature economic policy, with Trump’s decision to extend his tariff pause until Aug. 1 becoming the latest in a long string of about-faces that has Wall Street declaring the president “always chickens out.”
President Donald Trump has frequently flip-flopped on his tariff policy in the months since … More
Timeline
Trump formally rolled out his “Liberation Day” tariff policy at the White House, imposing sweeping tariffs on nearly all countries—and reversing course on earlier pledges he made about them, exempting “copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products” despite the White House previously claiming there would be no carveouts.
The final “Liberation Day” tariffs also weren’t fully “reciprocal” tariffs that matched the rate each country charges for U.S. imports, as Trump had promised, with the president instead saying “the tariffs will be not a full reciprocal” because “it would have been tough for a lot of countries and we didn’t want to do that.”
After promising the tariff rates would be calculated using a sophisticated formula based on both existing tariffs and non-tariff barriers with each country, experts determined the final “Liberation Day” rates were instead calculated by just dividing a country’s trade surplus with the U.S. by its export value.
Hours after Trump’s trade advisor Peter Navarro claimed on CNBC the administration’s tariff rates were “not a negotiation,” Trump told reporters he was open to making deals with other countries “as long as they’re giving us something that’s good.”
Trump and his advisors offered shifting views in the following days over whether or not the administration was open to negotiating tariff rates with other countries, with the president saying on Truth Social that his tariffs “WILL NEVER CHANGE” shortly before advisors suggested other countries were reaching out to begin trade talks. (The president later claimed April 7 that “both can be true” and “there can be permanent tariffs, and there can also be negotiations.”)
Trump unexpectedly paused the worst of his “Liberation Day” tariffs for 90 days—just hours after they took effect and caused the stock market to plunge—keeping only a baseline 10% rate and higher Chinese tariffs in place despite previously claiming he would not delay the tariffs.
Trump also almost immediately contradicted claims by his advisors that delaying the tariffs was his plan all along, as the president told reporters he only made the decision that morning after “people were jumping a little bit out of line” and “getting yippy.”
U.S. Customs and Border Protection issued guidance exempting smartphones, computers and other electronic devices from the tariffs, despite repeated claims from Trump and advisors like Howard Lutnick that they wanted that manufacturing to move to the U.S.
Trump then denied there was any exemption on electronics, claiming on Truth Social “there was “no Tariff ‘exception’ announced on Friday” and the tariffs on smartphones and other goods are “just moving to a different Tariff ‘bucket’,” even as others in his administration had already described the guidance as an exemption.
After previously claiming he was “comfortable” with the 145% tariff rate he imposed on Chinese imports, Trump told reporters he was planning to lower that number, saying he didn’t want to play “hard ball” with China and the rate would “come down substantially, but it won’t be zero.”
Trump signed an executive order exempting companies paying the 25% tariff on imported cars and auto parts from paying other tariffs on specific goods, such as those on steel and aluminum.
Trump, who previously said he’d make deals with “everybody,” tamped down hopes of imminent trade deals with other countries and suggested his officials were misspeaking about wanting to sign deals with every country who asks.
The president also suggested he did not feel any urgency to start negotiating with China and claimed the U.S. is “losing nothing” by not trading with Beijing—only for his administration to announce hours later that officials would hold discussions with Chinese officials in Switzerland that weekend.
After Trump publicly floated a potential 80% tariff rate on Chinese goods, Treasury Secretary Scott Bessent and Chinese officials announced a 90-day pause on the worst of the two countries’ tariffs on each others’ goods, with the U.S. lowering its tariff rate on most Chinese imports to a much lower 30%.
Trump suggested for the first time that his administration would send out letters to countries that impose new tariff rates on them without making deals, saying, “We have … 150 countries that want to make a deal, but you’re not able to see that many countries.”
Bessent backtracked on Trump’s claims about the letters, telling CNN and “Meet the Press” that letters will only be sent to nations who don’t negotiate in “good faith” informing them their tariffs will return to their previous April 2 rates.
After previously removing the tariffs on smartphones, Trump threatened new 25% tariffs on iPhones in an early morning Truth Social post, saying he will impose the tariff on Apple if its phones being sold in the U.S. are not “manufactured and built in the United States, not India, or anyplace else.”
The president also threatened new 50% tariffs on imports from the European Union starting June 1, writing on Truth Social that the bloc “has been very difficult to deal with” and claiming, “Our discussions with them are going nowhere!”
Bessent walked back the administration’s previous suggestions that it could make “90 deals in 90 days,” telling Fox News only that he expects there to be “more and more” deals announced “as we approach the end of the 90-day period” in July.
Trump postponed his planned 50% tariffs on the European Union to July 9, stating he would “rapidly get together” with European leaders to “see if we can work something out.”
Trump announced a raise on steel tariffs from 25% to 50% during an event in Pennsylvania, saying the new rate would go into effect on June 4.
Bessent testified to House lawmakers it was “highly likely” Trump will extend his tariff pause in order to complete negotiations with trading partners, and Trump similarly told reporters he wouldn’t rule out an extension.
Trump suggested he could pose significantly higher tariff rates for some countries than what he first proposed on “Liberation Day,” when rates maxed out at 50%, telling reporters he would start sending out letters to other countries imposing rates that range from “maybe 60 or 70% tariffs” to “10 or 20%.”
Trump announced on Truth Social his administration would start sending “letters and/or deals” on tariffs to other countries starting at noon the following day, pushing back the timeline after he previously promised they would start being sent July 4.
The president also threatened additional 10% tariffs on “any Country aligning themselves with the Anti-American policies of BRICS”—referring to the bloc that includes Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, United Arab Emirates, Ethiopia, Indonesia, and Iran—as the organization decried Trump’s tariffs at its summit. Trump later followed through by imposing 50% tariffs on Brazil.
Trump formally extended the deadline for his “Liberation Day” tariffs until Aug. 1, after sending out letters to 14 countries imposing new tariff rates starting that day if they don’t negotiate a trade deal with the Trump administration.
Trump shifted his position on whether that Aug. 1 date will stick, first telling reporters July 7 that it’s “firm, but not 100% firm,” but then claiming the next day on Truth Social that “there will be no change” to the deadline and “no extensions will be granted.”
Trump suggested he could raise the baseline tariff rate on imports from countries his administration doesn’t reach specific deals with, which is at 10% now, telling NBC News, “We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%.”
What Does ‘taco Trump’ Mean?
Trump’s frequent flip-flopping on tariffs—and taking rates down after the markets get spooked—has earned him the nickname of “TACO Trump” on Wall Street, which stands for “Trump always chickens out.” Deutsche Bank strategists raised their forecasts in June for the S&P 500 index based on the belief Trump has “already relented” on tariffs and there will be “further relents” in the future, and Wall Street analysts suggested the stock market had a muted response to Trump’s new round of tariff letters largely because of the president’s tendency to back off his tariff threats. IG Group chief market analyst Chris Beauchamp called the latest tariff rollout a “damp squib,” arguing, “Rightly or wrongly, investors think they know what happens from here.” “Either negotiations result, and a ‘deal’ of some sort (usually in the vaguest terms) is announced, allowing Trump to claim a win, or a fresh extension to the deadline is announced,” Beauchamp wrote.
What Has The Trump Administration Said?
White House spokesperson Kush Desai decried the “TACO Trump” allegations in a statement to Forbes, saying the administration’s position on trade “has never changed: the decades of unfair foreign trade practices that have left American workers behind are over.” “The media’s idiotic obsession with stupid memes is not going to change the fact that President Trump is successfully using tariffs to protect American industries, drive trillions in historic investment commitments, renegotiate lopsided trade deals, and raise billions in revenue for the federal government,” Desai told Forbes. Trump has called the “TACO Trump” nickname “nasty” and railed against the suggestion he’s “chickening out,” telling reporters in May, “You know, if I set a number, a ridiculous high number, and I go down a little bit, a little bit, they want me to hold that number.”
Can The Courts Stop Trump’s Tariffs?
Two courts have already ruled that Trump’s “Liberation Day” tariffs are unlawful and the president exceeded his authority by imposing them. The tariffs remain in place, however, as appeals courts then put those rulings on hold while the litigation plays out. The appeals court is scheduled to hold oral arguments on July 31 on the most sweeping lawsuit over the tariffs, so there won’t be any changes to the tariffs’ legality before that date. Plaintiffs in one of the lawsuits over the tariffs asked the Supreme Court to take up the issue on an urgent timeline, requesting that justices hear oral arguments over the tariffs’ legality as soon as their next term begins, or even sooner. The court rejected that request, however, so while it’s still possible the Supreme Court will ultimately decide whether Trump’s tariffs are legal, they won’t be doing so within the coming months.
What We Don’t Know: Will There Be More Tariff Changes?
It’s ultimately still unclear what the tariff rates will look like when the extended pause ends on Aug. 1—even for countries that receive letters from the Trump administration imposing new tariff rates, as the president wrote in the letters that their rates are subject to change “depending on our relationship with your Country.” Many of the countries that Trump targeted have vowed to continue negotiations in hopes of securing a better rate before Aug. 1. The trade deals also aren’t expected to completely get rid of tariffs on any country, as Lutnick claimed after the trade deal with the U.K. was announced that for countries that have trade deficits with the U.S., “The best they can do is 10%—most likely they’ll be higher.” Trump has also threatened 200% tariffs on pharmaceuticals and other products like semiconductors, but it remains to be seen if those will come to fruition and take effect. Democratic lawmakers have asked the Trump administration to exempt baby products from its tariffs, which Bessent testified in May was “under consideration,” but the White House has not made any announcements yet regarding those goods.
Chief Critic
Democrats have decried the constant changes in Trump’s tariff policy, which they argue further harm the economy. “The White House has no idea what it’s doing on tariffs and keeps flip flopping. Lutnick now says the tariff exemptions on, for example iPhones, are temporary. Why even do an exemption if you’re going to reverse it soon?” Rep. Ted Lieu, D-Calif., said on X on April 13. “The White House “has no strategy, and is rapidly losing credibility.”
Key Background
Trump has long touted tariffs as a cornerstone of his policy agenda, making them a centerpiece of his campaign and repeatedly pledging to put them in effect. His flip-flopping on the “Liberation Day” tariffs comes after Trump previously shifted his stance in how he handled tariffs on Mexico and Canada, initially announcing hours after his inauguration that he would impose 25% tariffs on Canada and Mexico on Feb. 1, which briefly took effect before he ultimately paused them for 30 days on Feb. 3. The tariffs then took effect again on March 4, though Trump later paused tariffs on automobiles and exempted many products from the tariffs on March 6. Trump has charged forward with his tariff plans despite longstanding warnings from economists that doing so would raise prices for American consumers and harm the economy, which have played out as the tariffs have taken effect, roiling the stock market and leading economic experts to warn of a looming recession.
