Commerce Secretary Howard Lutnick confirmed Sunday that President Donald Trump will allow new tariffs to go into effect as scheduled on August 1, signaling an end to what markets had dubbed the “TACO trade” — short for “Trump Always Chickens Out.” Lutnick emphasized there will be no extensions or grace periods, though he left open the possibility of future negotiations.
Speaking on Fox News, Lutnick said the tariffs would apply to dozens of countries and could generate between $700 billion and $1 trillion in annual revenue — far higher than the current pace of under $30 billion per month.
The Yale Budget Lab projects the effective blended tariff rate will top 20%, the highest since 1911. Critics warn this could stoke inflation, but Lutnick pushed back, saying prices on most goods would remain stable.
Despite that reassurance, markets are closely watching the next few days. Trump is scheduled to meet with EU officials Sunday, and trade talks with China are ongoing. Negotiations with Canada, Mexico, India, and South Korea remain unresolved.
The new tariffs are part of Trump’s broader strategy to restructure global trade relationships, a cornerstone of both of his presidential campaigns.
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