Tariffs That Won’t Die: Why Trump’s Trade War Stands Strong Against Wall Street, Republicans, and the Courts-groot - US NEWS

President Donald Trump is threatening to hike tariffs on a wide range of goods despite many Americans' growing dissaproval of his trade policies.

President Donald Trump is once again signaling a sharp escalation in his trade agenda, threatening to slap higher tariffs on a wide range of imports—even as polls show Americans from both parties increasingly opposed to his approach.

For years, critics have questioned not only the effectiveness of Trump’s tariffs but also his legal authority to impose them. Still, that hasn’t slowed him down. New rounds of tariffs are expected this week, with the president warning that more could follow.

The timing is striking. Inflation has begun to climb again, and many businesses say steeper import taxes will only make matters worse, raising costs and fueling higher consumer prices. The job market, meanwhile, shows signs of strain, with employers pulling back on hiring amid uncertainty over trade policy.

Yet on Wall Street, things look brighter. Stocks are trading near record highs, and mortgage rates—after months of stasis—have begun to ease. That mix of financial resilience has bolstered Trump’s confidence, giving him political cover to push ahead.

Mortgage rates fell in the weeks leading up to the Federal Reserve's decision to cut interest rates.

A White House spokesperson defended the tariff plan, arguing that previous administrations only complained about unfair trade practices while Trump has acted to protect American industries.

Conflicting signals
The buoyancy in markets is less about tariffs than about the Federal Reserve. The Fed cut interest rates for the first time in months and signaled that further reductions are likely. Lower rates tend to lift stock prices by reducing borrowing costs for companies and lowering yields on government bonds, which also helps bring down mortgage rates.

But there’s a catch: the Fed acted because the labor market has weakened noticeably. Concerned about a broader slowdown, central bankers cut rates by a quarter point and projected more cuts ahead to support growth.

Even so, the administration touted newly revised GDP data showing the economy expanded at a 3.8% annual rate in the second quarter—stronger than initially reported thanks to unexpectedly robust consumer spending. That resilience, however, ultimately depends on a steady job market, which has recently wobbled.

Why Trump's trade announcement won't calm Wall Street turmoil - POLITICO

The fading market guardrail
Initially, financial markets acted as a restraint on Trump’s tariff plans. When his administration first announced sweeping tariffs, bond yields spiked and stocks plunged, prompting Trump to delay implementation. At the time, he admitted watching markets closely, describing the turbulence as a reason for his temporary retreat.

But the mood has shifted. Investors are now more focused on corporate earnings, enthusiasm over artificial intelligence, and expectations of looser monetary policy. The S&P 500 has surged 33% since April and set nearly 30 record highs this year alone, muting the market’s role as a check on Trump’s trade agenda.

The looming court test
The real brake may soon come from the judiciary. In November, the Supreme Court will hear arguments in a case challenging Trump’s authority to impose tariffs under emergency economic powers. If the court rules against him, the government could be forced to refund an estimated $80 billion in tariffs collected this year.

Even then, Trump would retain other tools to pursue his aggressive trade strategy, ensuring the tariff fight is far from over.