Carney is in no hurry to sign a bad US trade deal

As August 1 approaches, the Trump administration is announcing eleventy-billion trade deals and patting themselves on the back about how gosh-darn terrific they are.

And if you believe that, maybe you'd be interested in buying a bridge in Brooklyn...

The trade deals are going to be announced along with Trumps big beautiful health care bill and the findings of his team down in Kenya investigating Obama’s birth certificate, I don’t know what all you liberals are getting keyed up about.

— Oliver Willis (@owillis.bsky.social) July 22, 2025 at 6:07 AM

Trump and his boys are hyping the shit out of tariffs now:

The British trade deal wasn't what they said it was, the Vietnamese are still yet to confirm Trump's announcement, and the Japanese say they're not signing a binding agreement. The White House has released the text of ZERO (0) deals, and maybe it's all just social media posts all the way down.

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— Justin Wolfers (@justinwolfers.bsky.social) July 25, 2025 at 1:41 PM

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Recent reports show that the Trump tariffs are already causing inflation in the United States:

Economists have repeatedly warned that U.S. President Donald Trump’s push to Make America Great Again through tariffs will Make Inflation Hot Again.

Now, after months of relatively stable consumer price increases, there’s mounting evidence tariffs are starting to bite American shoppers.
Official inflation data released last week for June showed U.S. inflation climbed at an annual rate of 2.7 per cent.
And an innovative tool tracking the cost of thousands of goods by their country of origin shows how the steep tariffs on imports from China in particular are driving prices higher.

...In an e-mail, Alberto Cavallo, founder of the Pricing Lab, said in normal times the pricing indexes would move lower over time because a lot of the products they track are household goods and electronics that get introduced at higher prices before being discounted.
In that way, goods from Mexico are the only ones following the long-term pattern, with others “deviating from their normal downward trend, and increasing significantly in the case of Chinese goods,” he wrote.
Commenting on the Harvard data in a note, Karl Schamotta, chief market strategist at Corpay, warned that prices for made-in-China goods “are likely to climb further in the months ahead as front-running efforts run their course and inventories are wound down.”

The Japan deal doesn't sound like a good one for the United States:

Trump’s big trade deal with Japan is a raw deal for Detroit Three automakers and American autoworkers. Cars made in Japan will be subject to a 15% tariff. Cars made in Mexico or Canada with U.S. parts will be subject to a 25% tariff, subject to credits for U.S.-made parts, but the overall product will likely be more costly to the consumer than its Japanese competitor. And cars made in the U.S. will face hefty tariffs on imported steel and aluminum, as well as higher-priced domestic steel and aluminum as U.S. steel and aluminum makers opportunistically raise prices to near-imported levels.

- Brad Karkkainen

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Paul Krugman explains the stupidity:
Paul Krugman

The Art of the Really Stupid Deal
What the heck were the Trumpists thinking?
... But why are U.S. manufacturers so upset with the Japan deal? Because in combination with Trump’s other tariffs this deal actually leaves many U.S. manufacturers worse off than they were before Trump began his trade war.
This is clearest in the case of automobiles and automotive products. Trump has imposed a 25 percent tariff on all automotive imports, supposedly on national security grounds. This includes imports from Canada and Mexico. And here’s the thing: Canadian and Mexican auto products generally have substantial U.S. “content” — that is, they contain parts made in America. Japanese cars generally don’t.
But now cars from Japan will pay only a 15 percent tariff, that is, less than cars from Canada and Mexico.
OK, it’s not quite that straightforward, because imports from Canada and Mexico receive a partial exemption based on the share of their value that comes from the United States. Yes, it’s getting complicated. But we may nonetheless now be in a situation where cars whose production doesn’t create U.S. manufacturing jobs will pay a lower tariff rate than cars whose production does.
Wait, there’s more. Trump has also imposed 50 percent tariffs on steel and aluminum, which are of course important parts of the cost of a car. Japanese manufacturers don’t pay those tariffs.
Overall, the interaction between this Japan deal and Trump’s other tariffs probably tilts the playing field between U.S. and Japanese producers of cars, and perhaps other products, in Japan’s favor.
If this sounds incredibly stupid, that’s because it is. ...You might imagine that making a deal with one of our most important trading partners must have involved a team of experienced, skilled negotiators backed by economic experts. But in reality it was clearly pure amateur hour.
...So Trump’s negotiators probably had no idea what they were doing, and didn’t realize that in their frantic rush to conclude a deal they were agreeing to tariffs that would be highly unfavorable to U.S. manufacturing.
Why were they frantic? Trump has been the subject of considerable mockery over having made big promises about his ability to negotiate trade deals, then coming up empty month after month. So he and his people were surely anxious to make some major announcements before his self-imposed deadline of Aug. 1 — anxious enough not to realize quite what they were agreeing to.
And of course they may also have hoped that a splashy trade deal would move the news cycle off Jeffrey Epstein.
Now that other countries have seen what Japan was able to get away with, I won’t be surprised if we see more deals in the near future. Will these deals be just as stupid? Probably.

And finally, isn't this the truth:

This assumes that after Trump gets the deal he wants, other countries will go phewf and it will be business as usual. I don’t think that’s true. Other countries will continue to try to shift their trade to each other to avoid the unstable volatile US. The deals just buy them time.

— Lucy Pick (@lucykpick.bsky.social) July 25, 2025 at 4:35 AM

Because America elected Trump twice, the world will take a long time to ever trust the United States again.

On a side note, wasn't it priceless yesterday to see Federal Reserve Chairman Jerome Powell refute Trump's lies in real time? They were touring the Federal Reserve and the media didn't know why -- I think Trump intended to embarass Powell about the cost of some office renovations, as he tries to build a case for firing him. It didn't work out so well for Trump:

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