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Though the administration has announced lots of July’s trade “deals” — the European Union, Japan, Korea, Vietnam, Thailand, Cambodia, Malaysia, Indonesia, the Philippines, Pakistan, Bangladesh — it hasn’t posted any actual agreement texts. In only one case (Indonesia) has published a “Joint Statement” with an agreed description of the contents. So lots about them is uncertain. With that noted, though, the arrangements appear to have three main features: higher prices for Americans, some commitments for exporters/intellectual property holders/investment seekers; and more future policy instability. More details and initial reactions to each –

1. Higher prices: First, bluntly put, most Americans will lose from these “deals.” Their common feature is a very high tariff, imposed by decree rather than legislation, on goods bought from abroad. Vietnamese-made goods like shoes and consumer electronics, for example, will get a 20% tax. So will pretty much everything from Taiwan and Bangladesh. Japanese and Korean products — cars, boats, matcha, MRI machines — get a modestly lower 15%, while things from the Philippines, Thailand, Cambodia, Indonesia, and Pakistan are at 19%. All are loaded on top of the regular, Congressionally authorized “MFN” tariff system. (“MFN,” the acronym for “most favored nation,” the term of art for the standard non-discriminatory approach to tariff rates.) The EU “deal” is somewhat different, imposing a 15% fee which replaces rather than being added to the regular MFN tariff rates. (Unless the regular rate is above 15%, in which case it just stays in place unchanged.)

For historical context, the overall average resembles the 19.8% tariff Franklin Roosevelt inherited from his predecessor Herbert Hoover in 1933. Alternatively, some specific product examples illustrate the daily-life impacts. Asian grocery stores buying cans of straw mushrooms from Vietnam, for example, will now pay 28.5% plus 6 cents per kilo. That’s three times the 8.5% plus 6 cents they were paying in March under the MFN tariff system. Auto repair shops buying Japanese or Korean brake-pads and fanbelts will pay 17.5% rather than 2.5% (and 15% for the German or Swedish equivalents); lovers of Dutch Gouda and Edam cheese, meanwhile, will pay 15% rather than the 10%. Or, in dollar terms, three months’ worth of “emergency decree” tariffs have already cost American buyers about $52 billion.

Tentative conclusion: Expect to pay more for things.

2a. Export commitments: Second, some Americans will benefit from export, intellectual property, and/or foreign investment commitments. Until the “deals” are published, we won’t know what these really are. But if the July 22 arrangement with Indonesia is a representative example, it includes some useful benefits and a lot of murkier “agreements to talk.” On the “useful” side, the U.S.-Indonesia “Joint Statement on Framework for United States-Indonesia Reciprocal Trade” unambiguously says Indonesia will “support a permanent moratorium on customs duties on electronic transmissions at the WTO immediately and without conditions”. (PPI view on the 30-year-old WTO “moratorium” and its value here.) The clauses on tariff and non-tariff issues, by contrast, lack timelines and feature cryptic phrasing: the U.S. and Indonesia “will work together to address Indonesia’s non-tariff barriers that affect bilateral trade and investment in priority areas” such as cars and agriculture, and “will negotiate facilitative rules of origin that ensure that the benefits of the agreement accrue primarily to the United States and Indonesia.”

Tentative conclusion: Wait to see the agreement texts before drawing any conclusions.

2b. Investment commitments: The arrangements with high-income allies also feature some commitments to invest in the United States, in the form of headline numbers: “$600 billion” from the EU, a “$350 billion” Korean investment fund, and “Japan will invest $550 billion directed by the United States to rebuild core American industries.” To put this in context, in 2024, Japanese firms invested $39 billion in U.S. industries through FDI, and Japan’s holdings of long-term securities grew by $91 billion. So new Japanese investment in the U.S. would likely hit $550 billion naturally over a few years, and the commitment might mean very little in real life. Alternatively, and more positively, the U.S. and Japanese governments might encourage specific private-sector investments like Nippon Steel’s purchase of the troubled U.S. Steel corporation.

Tentative conclusion: Don’t expect much.

3. Uncertainty: Finally, the so-called deals’ lives may be short. They all originate in the April 2 decree declaring the U.S. trade balance to be a “national emergency,” and then using the International Emergency Economic Powers Act to override Congressionally set tariff rates. The specialized U.S. Court of International Trade’s “V.O.S. Selections vs. Trump” decision struck down all the “IEEPA” tariffs on May 28 as an impermissible grab at Congress’ Constitutional power to set rates for “Taxes, Duties, Imposts, and Excises.” The Court of Appeals heard oral argument on this ruling last Thursday, and the Supreme Court will probably get the case this fall. If the C.I.T.’s view holds up, the “deals,” tariffs, costs, and (probably) commitments could be gone by Christmas.

Nor are the courts the sole source of uncertainty — the administration itself is another. The “deals” originate in a belief that the U.S. trade balance is a “national emergency.” (Professional economists pretty much shred that idea here.) But the effect of any deals on trade balance will be only marginal. This is because (a) a country’s trade balance equals the gap between its savings and its investment; (b) combining July’s tax cut bill with higher tariffs almost certainly means a higher U.S. fiscal deficit, and therefore (all else equal) a somewhat lower U.S. national savings rate, and (c) barring some unexpected surge in family savings, or a collapse in investment, the trade deficit will probably rise. If that’s the case, the administration might rip up this year’s arrangements and start all over again next summer — as it has done with the first Trump administration’s 2018 renegotiation of the U.S.-Korea Free Trade Agreement, which it wrongly advertised at the time as having “secured changes that will reduce the trade deficit”.

Tentative conclusion: Don’t expect policy stability soon.