Alex Durante: Federal Tax Economist on Donald Trump's tariffs, the trade war

Donald Trump's latest tariff deadline is rapidly approaching. 

The US President has reached 11 deals and agreed to pause tariff increases for Mexico, ahead of his deadline of 4pm today. 

He's indicated he'll raise the baseline tariff faced by most countries, including New Zealand. 

Federal Tax Economist Alex Durante told Ryan Bridge that overall, consumers and businesses should be bracing for higher tariffs and higher prices going forward. 

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Episode Transcript

Speaker 1 (00:00):
It's August the first. Yes, the deadline is here for
Trump and his tariffs, but the rest of the world
and New Zealand will be waiting probably another twenty four
hours before we get news from the White House and
exactly what we will pay. The White House has already
shaken hands with a few countries Japan, the EU, South Korea, Indonesia,
the UK. They're all getting lower rates, but others are

(00:21):
not so lucky. India you're looking at twenty five percent tariff,
Bangladesh thirty five percent, Brazilla whopping fifty. Canada have said
they're unlikely to reach a deal before the deadline. Mexico
Overnight has been extended. Alex Deronte is a federal tax
economist at the Tax Foundation in the US and joins
US now. Alex, welcome to the program. Nice to have

(00:41):
you here, Hi, thanks for having me. When do we
find out? When does the world find out exactly what's
going on and what that base rate might be?

Speaker 2 (00:52):
I think I think we're going to be staying up
late and waiting until until midnight to see what actually happens.
I mean over here as a tax foundation, it is
quite on starry, even for us on what rates some
of these countries are going to be facing. You know,
right now most countries are facing a ten percent universal
baseline tariff that includes Australia and New Zealand. But the

(01:13):
President has indicated sort of over the past month that
he has interests I think in moving that baseline tarer
higher to somewhere between fifteen and twenty percent. So I
think altogether consumers and businesses should be bracing for higher
tariffs and higher prices for sure going forward.

Speaker 1 (01:33):
Do you yet but higher than the team saint? Do
you think he will up that vice.

Speaker 2 (01:37):
Right right now? I mean we're hearing as I said,
this is all speculative, of course, but you know, somewhere
either fifteen percent or twenty percent. If all of the
reciprocal tariffs go into effect tomorrow as scheduled, that would
move the average apply tariff rate to just over twenty percent.

Speaker 1 (02:02):
Which big countries, big trading partners of Americas do you
think should be most concerned?

Speaker 2 (02:10):
Well, so let's see here, So the president was he
had well, he announced higher rates on Canada and Mexico.
Both of those countries are currently paying or rather our
consumers to import those goods are paying a twenty five
percent tariff, and the Kada rate is scheduled to rise
by ten percentage points to thirty five percent tomorrow, and

(02:31):
the Mexico tariff was scheduled to rise to thirty percent,
but the President announced a ninety day pause on that
increase in that tariff rate. Kevin, I would also add
that we need to be concerned about the EU. The
President did announce that he would be imposing a fifteen
percent tariff on those imports as part of the of

(02:53):
the deal that is being currently negotiated right now. And
then finally, the highest of these parap rates are the
rates that we're opposing on Chinese imports, which August twelfth
are scheduled to rise to one hundred and twenty five percent.
So really it's the EU, Mexico, Canada and China we should,

(03:16):
you know, continue to be watching house.

Speaker 1 (03:18):
Americans are obviously watching this as closely as we are.
What are they thinking about the fact that he's going
to be potentially upping this and he's doing it to
friends and allies and it doesn't seem to matter.

Speaker 2 (03:29):
Right Well, I mean, I think, as I said earlier,
you know, I think consumers have been so you know,
businesses have been somewhat fortunate so far, although you know,
we're although they're paying much higher tariffs than they did
last year. You know, the President did delay you know,
these reciprocal tariffs for for a few months, but unfortunately,

(03:50):
you know, it does seem that the President is dead
set on implementing a host of them tomorrow and that
is going to likely have significant impacts on prices over
over the coming month.

Speaker 1 (04:02):
Alex, appreciate your time, Thanks so much for being with us.
It's Alex Deronte. He's the federal tax economist at the
Tax Foundation over in the United States, and so our
gut of the word from our officials over in Washington
is that that base ten percent will stay, but that
Trump is the ultimate decision maker and he can do
what he wants. And Alex is telling us there he's

(04:23):
hearing it's going to fifteen or twenty. So basically when
none the wiser at this point in the in the day.
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