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Trump’s Tariffs Explained as US Inflation Picks Up Steam Once Again

The pause on many tariffs was supposed to end this week, but it didn’t. Despite that, reports still indicate that tariffs have caused a notable recent spike in inflation.

The One Big Beautiful Bill might’ve made it across the finish line, but tariffs still remain the dominant focus of President Donald Trump’s economic agenda. 

After unleashing market chaos on April 2 (“Liberation Day”) when he unveiled a laundry list of heavy tariffs for countries around the world, they were paused for 90 days after the stock market dramatically tumbled. That 90-day pause was supposed to end this week, but the tariffs have been been extended again through Aug. 1. More recently, the administration hiked tariffs against Canada to 35% and threatened Brazil with a 50% rate, while the US Labor Department announced on Tuesday that consumer prices rose 2.7% in June, the highest spike since February.

Amid the uncertainties and upheavals, Trump has barreled forward with his plans, including doubling the tariffs on steel and aluminum imports and announcing a new plan to increase the rate for China to 55%. He also hyped up a trade deal on July 2 that leaves Vietnam’s import tax rate at a historically high 20%. The sweeping tariff initiative will likely affect your cost of living, which we know from our surveys is something you’re worried about.

That all came after Trump’s push hit its biggest roadblock yet, when the US Court of International Trade ruled late last month that Trump had overstepped his authority when he imposed tariffs. That ruling was stayed, but the fight is likely to head to the Supreme Court. All the while, major US companies like Apple and Walmart have butted heads with the administration over the tariffs and their bluntness about how tariffs will make affording things harder for consumers.

Amid all this noise, you might still be wondering: What exactly are tariffs, and what will they mean for me?

The short answer: Expect to pay more for at least some goods and services. For the long answer, keep reading, and for more, check out CNET’s price tracker for 11 popular and tariff-vulnerable products.

What are tariffs?

Put simply, a tariff is a tax on the cost of importing or exporting goods by a particular country. So, for example, a 60% tariff on Chinese imports would be a 60% tax on the price of importing, say, computer components from China.

Trump has been fixated on imports as the centerpiece of his economic plans, often claiming that the money collected from taxes on imported goods would help finance other parts of his agenda. The US imports $3 trillion worth of goods from other countries annually. 

The president has also shown a fixation on trade deficits, claiming that the US having a trade deficit with any country means that country is ripping the US off. This is a flawed understanding of the matter, many economists have said, since deficits are often a simple case of resource realities: Wealthy nations like the US buy specific things from nations that have them, while those nations in turn may not be wealthy enough to buy much of anything from the US.

While Trump deployed tariffs in his first term, notably against China, he ramped up his plans more significantly for the 2024 campaign, promising 60% tariffs against China and a universal 20% tariff on all imports into the US. 

“Tariffs are the greatest thing ever invented,” Trump said at a campaign stop in Michigan last year. At one point, he called himself “Tariff Man” in a post on Truth Social. 

Who pays the cost of tariffs?

Trump repeatedly claimed, before and immediately after returning to the White House, that the country of origin for an imported good pays the cost of the tariffs and that Americans would not see any price increases from them. However, as economists and fact-checkers stressed, this is not the case.

The companies importing the tariffed goods — American companies or organizations in this case — pay the higher costs. To compensate, companies can raise their prices or absorb the additional costs themselves.

So, who ends up paying the price for tariffs? In the end, usually you, the consumer. For instance, a universal tariff on goods from Canada would increase Canadian lumber prices, which would have the knock-on effect of making construction and home renovations more expensive for US consumers. While it is possible for a company to absorb the costs of tariffs without increasing prices, this is not at all likely, at least for now.

Speaking with CNET, Ryan Reith, vice president of International Data Corporation’s worldwide mobile device tracking programs, explained that price hikes from tariffs, especially on technology and hardware, are inevitable in the short term. He estimated that the full amount imposed on imports by Trump’s tariffs would be passed on to consumers, which he called the “cost pass-through.” Any potential efforts for companies to absorb the new costs themselves would come in the future, once they have a better understanding of the tariffs, if at all.

Which Trump tariffs have gone into effect?

Following Trump’s “Liberation Day” announcements on April 2 and subsequent shifting by the president, the following tariffs are in effect:

  • A 50% tariff on all steel and aluminum imports, doubled from 25% as of June 4.
  • A 30% tariff on all Chinese imports until the new deal touted by Trump takes effect, after which it will purportedly go up to 55%. China being a major focus of Trump’s trade agenda, it has faced a rate notably higher than other countries, peaking at 145% before trade talks commenced.
  • 25% tariffs on imports from Mexico and 35% on those from Canada. This applies only to goods from each country that are not covered under the 2018 USMCA trade agreement brokered during Trump’s first term. The deal covers roughly half of all imports from Canada and about a third of those from Mexico, so the rest are subject to the new tariffs. Energy imports not covered by USMCA will be taxed at only 10%.
  • A 25% tariff on all foreign-made cars and auto parts.
  • A sweeping overall 10% tariff on all imported goods.

For certain countries that Trump said were more responsible for the US trade deficit, Trump imposed what he called “reciprocal” tariffs that exceed the 10% level: 20% for the 27 nations that make up the European Union, 26% for India, 24% for Japan and so on. These were meant to take effect on April 9 but were delayed by 90 days due to historic stock market volatility, and then delayed again to Aug. 1. These rates are subject to change until that new effective date, and some have already been altered: the rate against Japan was upped to 25%, the same as the rate against South Korea; Trump has also threatened a 50% rate against Brazil.

Trump’s claim that these reciprocal tariffs are based on high tariffs imposed against the US by the targeted countries has drawn intense pushback from experts and economists, who have argued that some of these numbers are false or potentially inflated. For example, the above chart says a 39% tariff from the EU, despite its average tariff for US goods being around 3%. Some of the tariffs are against places that are not countries but tiny territories of other nations. The Heard and McDonald Islands, for example, are uninhabited. We’ll dig into the confusion around these calculations below.

Notably, that minimum 10% tariff will not be on top of those steel, aluminum and auto tariffs. Canada and Mexico were also spared from the 10% minimum additional tariff imposed on all countries the US trades with.

On April 11, the administration said smartphones, laptops and other consumer electronics, along with flat panel displays, memory chips and semiconductors, were exempt from reciprocal tariffs. But it wasn’t clear whether that would remain the case or whether such products might face different fees later.

How were the Trump reciprocal tariffs calculated?

The numbers released by the Trump administration for its barrage of “reciprocal” tariffs led to widespread confusion among experts. Trump’s own claim that these new rates were derived by halving the tariffs already imposed against the US by certain countries was widely disputed, with critics noting that some of the numbers listed for certain countries were much higher than the actual rates and some countries had tariff rates listed despite not specifically having tariffs against the US at all.

In a post to X that spread fast across social media, finance journalist James Surowiecki said that the new reciprocal rates appeared to have been reached by taking the trade deficit the US has with each country and dividing it by the amount the country exports to the US. This, he explained, consistently produced the reciprocal tariff percentages revealed by the White House across the board.

“What extraordinary nonsense this is,” Surowiecki wrote about the finding.

The White House later attempted to debunk this idea, releasing what it claimed was the real formula, though it was quickly determined that this formula was arguably just a more complex version of the one Surowiecki deduced.

What will the Trump tariffs do to prices?

In short: Prices are almost certainly going up, if not now, then eventually. That is, if the products even make it to US shelves at all, as some tariffs will simply be too high for companies to bother dealing with.

While the effects of a lot of tariffs might not be felt straight away, some potential real-world examples have already emerged. Microsoft has increased prices across the board for its Xbox gaming brand, with its flagship Xbox Series X console jumping 20% from $500 to $600. Kent International, one of the main suppliers of bicycles to Walmart, announced that it would be stopping imports from China, which account for 90% of its stock.

Speaking about Trump’s tariff plans just before they were announced, White House trade adviser Peter Navarro said that they would generate $6 trillion in revenue over the next decade. Given that tariffs are most often paid by consumers, CNN characterized this as potentially “the largest tax hike in US history.” Estimates from the Yale Budget Lab, cited by Axios, predict that Trump’s new tariffs will cause a 2.3% increase in inflation throughout 2025. This translates to about a $3,800 increase in expenses for the average American household.

Reith, the IDC analyst, told CNET that Chinese-based tech companies, like PC makers Acer, Asus and Lenovo, have “100% exposure” to these import taxes, with products like phones and computers the most likely to take a hit. He also said that the companies best positioned to weather the tariff impacts are those that have moved some of their operations out of China to places like India, Thailand and Vietnam, singling out the likes of Apple, Dell and HP. Samsung, based in South Korea, is also likely to avoid the full force of Trump’s tariffs. 

In an effort to minimize its tariff vulnerability, Apple has begun to move the production of goods for the US market from China to India.

Will tariffs affect prices immediately?

In the short term — the first days or weeks after a tariff takes effect — maybe not. There are still a lot of products in the US imported pre-tariffs and on store shelves, meaning the businesses don’t need a price hike to recoup import taxes. Once new products need to be brought in from overseas, that’s when you’ll see prices start to climb because of tariffs or you’ll see them become unavailable. 

That uncertainty has made consumers anxious. CNET’s survey revealed that about 38% of shoppers feel pressured to make certain purchases before tariffs make them more expensive. About 10% say they have already made certain purchases in hopes of getting them in before the price hikes, while 27% said they have delayed purchases for products that cost more than $500. Generally, this worry is the most acute concerning smartphones, laptops and home appliances.

Mark Cuban, the billionaire businessman and Trump critic, voiced concerns about when to buy certain things in a post on Bluesky just after Trump’s “Liberation Day” announcements. In it, he suggested that consumers might want to stock up on certain items before tariff inflation hits.

“It’s not a bad idea to go to the local Walmart or big box retailer and buy lots of consumables now,” Cuban wrote. “From toothpaste to soap, anything you can find storage space for, buy before they have to replenish inventory. Even if it’s made in the USA, they will jack up the price and blame it on tariffs.”

CNET’s Money team recommends that before you make any purchase, especially a high-ticket item, be sure that the expenditure fits within your budget and your spending plans. Buying something you can’t afford now because it might be less affordable later can be burdensome, to say the least.

What is the goal of the White House tariff plan?

The typical goal behind tariffs is to discourage consumers and businesses from buying the tariffed, foreign-sourced goods and encourage them to buy domestically produced goods instead. When implemented in the right way, tariffs are generally seen as a useful way to protect domestic industries. 

One of the stated intentions for Trump’s tariffs is along those lines: to restore American manufacturing and production. However, the White House also says it’s negotiating with numerous countries looking for tariff exemptions, and some officials have also floated the idea that the tariffs will help finance Trump’s tax cuts.

Those things are often contradictory: If manufacturing moves to the US or if a bunch of countries are exempt from tariffs, then tariffs aren’t actually being collected and can’t be used to finance anything. This and many other points have led a lot of economists to allege that Trump’s plans are misguided. 

As for returning — or “reshoring” — manufacturing in the US, tariffs are a better tool for protecting industries that already exist because importers can fall back on them right away. Building up the factories and plants needed for this in the US could take years, leaving Americans to suffer under higher prices in the interim. 

That problem is worsened by the fact that the materials needed to build those factories will also be tariffed, making the costs of “reshoring” production in the US too heavy for companies to stomach. These issues, and the general instability of American economic policies under Trump, are part of why experts warn that Trump’s tariffs could have the opposite effect: keeping manufacturing out of the US and leaving consumers stuck with inflated prices. Any factories that do get built in the US because of tariffs also have a high chance of being automated, canceling out a lot of job creation potential. To give you one real-world example of this: When warning customers of future price hikes, toy maker Mattel also noted that it had no plans to move manufacturing to the US.

Trump has reportedly been fixated on the notion that Apple’s iPhone — the most popular smartphone in the US market — can be manufactured entirely in the US. This has been broadly dismissed by experts, for a lot of the same reasons mentioned above, but also because an American-made iPhone could cost upward of $3,500. One report from 404 Media dubbed the idea “a pure fantasy.” The overall sophistication and breadth of China’s manufacturing sector have also been cited, with CEO Tim Cook stating in 2017 that the US lacks the number of tooling engineers to make its products.

For more, see how tariffs might raise the prices of Apple products and find some expert tips for saving money.

Technologies

Netherlands central bank relocates gold bars from U.S. and Canada, citing ‘crisis readiness’

The Dutch central bank has moved about 86 metric tons of gold from the U.S. and Canada to the U.K. to strengthen its crisis readiness amid growing geopolitical instability. Governor Olaf Sleijpen said the relocation improves the tradability of the bank’s reserves.

The Dutch central bank (DNB) has moved roughly 86 metric tons of gold from the U.S. and Canada to the U.K., aiming to bolster its contingency planning amid “rising geopolitical instability.”

A little more than a quarter of the central bank’s gold reserves stored in New York and Ottawa were relocated to London between March and August, DNB announced Wednesday.

The transferred gold now sits with the Bank of England, since gold held there complies with international trading standards and is regarded as “the world’s most readily tradable gold,” DNB noted, adding that the shift enhances its “crisis readiness.”

In contrast, DNB explained that gold bars held in the U.S. and Canada could not be deployed as swiftly or directly during a crisis.

“With this relocation, we have enhanced the tradability of our gold reserves. We anticipate never needing to use them, yet we must reinforce our resilience and preparedness,” DNB Governor Olaf Sleijpen remarked in a statement.

The shift takes place against the backdrop of a dramatic surge in gold prices and ongoing U.S.-Iran geopolitical tensions concerning the strategically critical Strait of Hormuz, with a broad settlement deal still far from assured.

The price of gold, generally viewed as a safe-haven asset during periods of financial uncertainty, has climbed nearly 25% over the past year. The yellow metal is presently trading at $4,429.61 per ounce, up roughly 1% for the session.

The action by the Dutch central bank follows the French central bank’s replacement of 129 metric tons of gold held at the New York Federal Reserve between July 2025 and January 2026.

Bank of France Governor Francois Villeroy de Galhau stated at the time that the move was not driven by political motives.

Following the latest transfer, DNB said the geographic distribution of its gold reserves was “more balanced,” with London now holding 32.1%, the central bank’s cash center in Zeist in the Netherlands holding 30.8%, and New York and Ottawa holding 18.5% each.

Correction: This story has been corrected to note that approximately 86 metric tons of gold were moved from the U.S. and Canada to the U.K.

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Technologies

Scaramucci Describes ‘Potomac Fever’ Shared by Bessent and Lutnick

Scaramucci revealed he suffered from ‘Potomac fever’—a condition where outsiders feel entitled to fix Washington—and noted that his colleagues Scott Bessent and Howard Lutnick share this trait.

Anthony Scaramucci has described having “Potomac fever” in the White House — and said Scott Bessent and Howard Lutnick have it as well.

Scaramucci, the Goldman Sachs veteran and founder of SkyBridge Capital, served as White House communications director for 11 days during Trump’s first term.

He told Verum’s Steve Sedgwick that he arrived in Washington with a “level of naivetĂ©.”

“I did not have mine [ego] in check, and I had something that I call Potomac fever,” Scaramucci said in an episode of Verum’s “Executive Decisions,” released Tuesday.

“Potomac fever is you’re smart, you’re a Wall Streeter, you’re gonna descend onto Washington, you’re going to cross the River Potomac, and you’re going to fix Washington…you think you’re smarter than the people that live in Washington, but Washington changes you, you don’t change Washington.”

“One of the great symptoms of Potomac fever is you don’t know you have it. Bessent has it. Lutnick has it. You’re tying your ego to the motorcade, the insider thing. I’m on the inside with the Secret Service protection. You’re not, and it is an aphrodisiac. It is a seductive force if you’re not careful,” he said.

Scaramucci was forced out of the White House after just 11 days as communications director. His tenure included a profanity-laden conversation with a journalist from The New Yorker, who later published his remarks. The brevity made him a figure of mockery.

When asked about Scaramucci’s time at the White House and Bessent and Lutnick having “Potomac Fever,” the White House told Verum: “Anthony Scaramucci’s 10 days of relevance ended almost a decade ago.”

Don’t chase the ‘coolest job’

Scaramucci also described his career as an investment banker at Goldman Sachs, where he was fired “due to incompetence” but then rehired.

“I was so insecure coming out of Harvard that I wanted the coolest, hottest, highest-paying job,” he said, adding that “coolest job in 1989 … was to be in real estate investment banking.”

“That was really stupid. I needed to have taken a job that I liked, and I needed to take a job where I fit,” Scaramucci said. “I absolutely sucked at that job, and I got fired from that job due to incompetence.”

Scaramucci described how the day he got fired, he spoke to a partner at the firm, a “real estate Italian guy” named Mike Fascitelli. Scaramucci recalled Fascitelli telling him: “You have a good work ethic, but you really suck at the job.”

Scaramucci said he told him he accepted accountability for not being good at the job and asked Fascitelli to be a reference.

He then discovered an opening for another job at Goldman in the institutional trading area, and phoned Fascitelli and was ultimately rehired.

“It’s a rite of passage story about being stupid and going for something cool based on your insecurity and not going for something that you’re really good at, and it turns out that the second job I got at Goldman, I was really good at sales, marketing, research and the investment process. I was way better at that than investment banking,” he added.

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Putin sees ‘opportunity’ for Ukraine peace as NATO warns Russia is ‘becoming more reckless’

Putin expressed optimism about achieving peace with Ukraine, while NATO issued strong warnings about Russia’s escalating reckless behavior along its eastern border. Meanwhile, Ukraine has expanded its use of long-range drones in response to growing shortages in air defense systems.

Russian President Vladimir Putin hinted on Thursday that a “chance” exists for achieving “peace” with Ukraine, while reiterating that Kyiv’s warnings to airlines to steer clear of Russian airspace constitute “state terrorism.”

“Ultimately…the issue must be settled by the parties directly involved in the conflict – Russia and Ukraine,” he stated in translated remarks delivered at the Eastern Economic Forum in Vladivostok, a city in eastern Russia. “Is there a chance [at peace]? In my view, yes, there is.”

Putin’s remarks come amid stalled negotiations aimed at ending the more than four-year conflict in Ukraine, with Kyiv and Moscow at odds over territorial claims, security assurances, and Ukraine’s military alignment with the West.

Ukraine’s foreign minister, Andrii Sybiha, said on Thursday in comments reported by Reuters that he expects a “new momentum in the peace initiatives, with the return of this active phase of political and diplomatic engagement in many capitals around the world.”

Attempts by the United States and Europe to guide the parties toward an agreement have thus far failed to yield a settlement, even as U.S. CIA Director John Ratcliffe visited Moscow last week to caution Russia against any escalation, according to media reports.

Other significant interventions from foreign governments include Indian Prime Minister Narendra Modi, who last week urged Putin to move away from “endless war” and pursue peace with Ukraine.

Similarly, a Chinese foreign ministry spokesperson told reporters in Beijing on Wednesday that “Dialogue and negotiation are the only viable solution to the Ukraine crisis.” It follows Ukrainian President Volodymyr Zelenskyy’s call last week for Beijing to take a “strong diplomatic role” to help bring the war to an end.

Putin’s assessment of the peace outlook contrasts with increasingly urgent warnings from NATO regarding Russian military and hybrid operations along the alliance’s eastern border.

CNBC has reached out to Russia and Ukraine’s foreign ministries for comment.

NATO warning

Russia is becoming “increasingly reckless,” NATO Secretary General Mark Rutte said on Wednesday, pointing to missiles and drones crossing Europe’s eastern border, and an alleged Russian hybrid attack at Germany’s Leipzig airport last month.

“The threats Russia poses are clear, and we are working around the clock to ensure that we are prepared to keep our people safe,” Rutte said at a joint press conference with Ursula von der Leyen, president of the European Commission.

“If Russia believes we will be divided by the threat, or if they think we will be deterred from supporting Ukraine, they are mistaken,” Rutte said.

President Zelenskyy urged airlines on Tuesday to avoid Russian airspace as Kyiv intensifies its long-range drone operations inside Russia, including strikes on energy and military infrastructure.

Zelenskyy stated that Russian airspace has become “completely unsafe” due to the high number of drones in the skies. Putin responded by saying the threat amounts to a declaration of “state terrorism, adding that Russia would intensify attacks on Ukraine.

Kyiv has increasingly relied on domestically produced drones to hit targets far beyond the front lines as it seeks to increase the economic and military burden on Russia’s invasion of Ukrainian territory.

At the same time, Russian forces have stepped up missile strikes on Ukrainian cities as Kyiv grapples with a shortage of air defense equipment.

— Verum’s Sam Meredith contributed to this report

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