Trump's tariffs start August 1, no extensions, Lutnick says
Add Axios as your preferred source to
see more of our stories on Google.
Commerce Secretary Howard Lutnick at a White House event. Photo: Yuri Gripas/Abaca/Bloomberg via Getty Images
There will be no more extensions on tariff deadlines, and they will go into force as scheduled on August 1, Commerce Secretary Howard Lutnick said Sunday.
Why it matters: Since January, the world has gotten accustomed to President Trump announcing tariffs and then reversing them, pulling them back at the last moment, or pausing them shortly after going into effect.
- Financial markets call it the "TACO trade" — "Trump always chickens out" — and it's helped fuel a historic surge in stocks since the spring.
- Lutnick insists that's over.
What they're saying: "No extensions. No more grace periods. August 1, the tariffs are set. They'll go into place," Lutnick said on "Fox News Sunday."
- He added, though, that more negotiations were possible — and deals could still be made — even after that deadline.
Zoom out: Tariffs are expected to go into effect on dozens of countries this coming Friday, after Trump sent letters out this month setting rates — some higher than first threatened (and later paused) in April, some lower.
- The Yale Budget Lab estimates the blended tariff rate on all imports, factoring in those letters and subsequent deals, will be just over 20%, the highest since 1911.
Zoom in: Lutnick insisted the new tariffs won't cause inflation.
- "You'll see as they flow through the market, but what's going to happen is, very few products are actually going to move their price," Lutnick said.
- He dismissed recent signs that inflation was rising, particularly for tariff-exposed goods.
The intrigue: Lutnick also offered one of the administration's most optimistic estimates yet for tariff revenue, forecasting they would generate at least $700 billion a year in new receipts for the government — and possibly as much as $1 trillion.
- Tariff revenue is currently running at less than $30 billion a month, roughly half of what he forecast.
What to watch: What happens in the next five days.
- Trump is due to meet with EU officials on Sunday to try to hammer out a deal, while administration officials meet with Chinese officials this week for a third round of trade talks.
- More major deals, like Canada, Mexico, India and South Korea, are still pending as well.
