Announces higher tariffs on Japanese imports as US manufacturers struggle

(Originally published July 23 in “What in the World“) The U.S. economy’s decline is gathering pace, according to the latest evidence from the Conference Board.

The New York-based research organization said Monday that its index of leading indicators fell 0.3% in June, capping a 2.8% decline in the first half of 2025 that hastens a decline that pulled it down 1.3% in the second of 2024. That suggests that U.S. manufacturing is likely to slow in the second half of this year.

Trump, meanwhile, announced a new trade deal with Tokyo that raises existing tariffs on imports from Japan to 15% from their current 10%. Trump had threatened to raise tariffs on Japanese imports to 25% Aug. 1 if no deal was reached. Like all of Trump’s social-media pronouncements, this one was short on specifics. Japanese imports will presumably also still be subject to Trump’s blanket 50% tariff on imported aluminum and steel and his 25% tariff on imported cars—though some deduced that tariffs on imported Japanese branded cars would enjoy the lower 15% rate. Japan is the fifth biggest source of U.S. imports, with cars the biggest Japanese import.

Trump’s steel tariffs are enabling domestic U.S. producers to jack up their own prices. Domestic steel makers have raised their prices by 16% so far this year, according to official data. Higher prices for raw materials and imported goods are already hurting automakers: GM said Tuesday that tariffs had cost it $1 billion in the first quarter, cutting profits by more than a third. Stellantis said Monday tariffs had contributed to its own €2.3 billion loss in the first half of the year.

Trump’s threatened tariffs on pharmaceuticals, meanwhile, only stand to worsen the risks stemming from a rising U.S. over-dependence on imported drugs and their ingredients, the Council on Foreign Relations warns.