Jul 11, 2025
Subscribers will not have been surprised by the return of the tariff monster. In our June Research Dossier, “When Fiscal Dominance Met De-Globalization” we wrote,
“In essence, Trump’s team decided that the correct sequencing involved getting the Big Beautiful Bill (BBB) deal across the line before subsequently circling back to tariffs. Doing it in this order prevents Congress from tying support for the budget to tariff special pleading, giving the Trump team much more freedom of manoeuvre. Moreover, the massive fiscal stimulus (CBO) implicit in the BBB presents an implicit case for budget hawks to reverse some of the fiscal damage with tariffs.”
The One Big Beautiful Bill Act was signed into law on July 4th. Trump didn’t waste any time getting his tariff mojo back on track, but the newly announced Brazil tariffs had a lot of market folk scratching their heads. The US runs a trade surplus with Brazil, and while freedom of speech is evidently dear to the President’s heart, it’s stretching credulity (sad face emoji!) to imagine that he is punishing Lula for his anti-X policies.