JUANA SUMMERS, HOST:
President Trump says he's going to give Mexico more time to work out a trade deal before imposing higher tariffs. The move comes just a day before higher import taxes were set to kick in on goods from other countries around the world. NPR's Scott Horsley has been keeping tabs on the ever-changing tariff landscape and joins us now. Hey, Scott.
SCOTT HORSLEY, BYLINE: Hi, Juana.
SUMMERS: So Scott, today the president gave Mexico another extension to reach a trade deal. Tell us the backstory.
HORSLEY: This is another reminder that President Trump's threats often come with escape hatches. Just yesterday, he'd written on social media that the August 1 deadline for higher tariffs, quote, "stands strong and will not be extended." But after talking this morning with his Mexican counterpart, Claudia Sheinbaum, Trump agreed to hold off imposing a 30% tariff on Mexican goods for another 90 days. And the president says he hopes a new trade deal with Mexico can be worked out during that time. You know, Mexico is one of the top trading partners in the U.S. for both exports and imports. The two countries have a long border in common, and their economies are highly integrated. So really, it's in both countries' interests not to mess that up.
SUMMERS: Now, I understand that lots of other trading partners were facing higher tariffs tomorrow, which is August 1. What is going on with those?
HORSLEY: Yeah, since early April, the U.S. has been charging a 10% tax on most imports from around the world, and that could ratchet higher - in some cases, a lot higher. Most goods from Japan, Korea and the European Union are set to face a tariff of 15%. Some goods from Canada could be taxed at 35%. But an executive order posted this evening says most of those higher tariffs, with the exception of Canada's, will not take effect for at least a week, so stay tuned.
SUMMERS: I will. OK, let me ask you this - how is all of this affecting businesses and shoppers here in the United States?
HORSLEY: You know, even at 10%, worldwide tariffs are much higher than anything the U.S. has seen in decades, and the cost is starting to show up in the prices that consumers pay. We got some new inflation numbers from the Commerce Department this morning. They show that inflation was higher in June than it was the month before. Had it not been for Trump's tariffs, inflation might well be coming down. Here's how Federal Reserve Chairman Jerome Powell described the situation yesterday.
(SOUNDBITE OF ARCHIVED RECORDING)
JEROME POWELL: Services inflation has continued to ease while increased tariffs are pushing up prices in some categories of goods.
HORSLEY: And that's a big reason the Fed decided not to cut interest rates yesterday, despite a high-pressure campaign by the president.
SUMMERS: Now, opponents question whether Trump's tariffs are even legal. Where does that challenge stand now?
HORSLEY: Yeah, in ordering most of these tariffs, Trump has relied on a statute from the 1970s, but that law does not explicitly authorize the president to impose tariffs. That's a power that's usually reserved for Congress. So some businesses and states have asked the courts to strike these tariffs down. The White House insists the president is acting within his broad emergency powers, but attorney Neal Katyal, who represents some of those businesses, challenged that notion during an appeals court hearing earlier today.
(SOUNDBITE OF ARCHIVED RECORDING)
NEAL KATYAL: You just heard an argument that the president can do whatever he wants, whenever he wants, for as long as he wants, so long as he declares an emergency. That is a breathtaking claim to power that no president has asserted in 200 years, and the consequences are staggering.
HORSLEY: Two months ago, a lower court agreed and ordered these tariffs struck down, but the tariffs remain in place for now as the case makes its way through the appeals process. Ultimately, this could be decided by the Supreme Court.
SUMMERS: NPR's Scott Horsley, thank you.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
