The US economy is being reshaped by a combination of aggressive trade policies, technological disruption, and a cooling retail tourism sector—creating uncertainty across industries and global markets.
Tariff shockwaves: Trump’s trade agenda remakes global supply chains
President Donald Trump’s sweeping trade agenda is setting new benchmarks for US import tariffs, with baseline rates now ranging between 15% and 50% depending on the country.
Key developments include:
- A 15% tariff agreement with Japan, paired with a $550 billion Japanese investment into the US
- A pending 15% deal with the European Union to avoid threatened 30% tariffs on over $100B of US goods
- A 19% tariff deal with the Philippines, in which the country will drop all tariffs on US imports
- Similar deals underway with South Korea, Taiwan, and Indonesia, all aimed at reducing US tariffs in exchange for market access and investment pledges
But not all responses have been positive. The EU is preparing retaliatory tariffs targeting US exports like Boeing aircraft and bourbon, while countries such as Brazil are bracing for economic fallout. Brazil’s citrus belt faces devastation from a 50% US tariff on orange juice, a blow to the country’s $1.3 billion trade with America.
Even US automakers are sounding alarms. While Japanese auto tariffs were cut to 15%, cars from Canada and Mexico may still face 25%-35% tariffs starting August 1. GM has already reported a $1.1 billion tariff hit in Q2.
Business impact: Companies scramble and earnings diverge
Across sectors, the Trump trade regime is reshaping operations and earnings:
- Copper traders are racing to dock ships at US ports before August 1, when tariffs on the metal will jump to 50%
- Hyundai Motor warned of worsening profit due to new US auto tariffs
- SAP saw its stock fall over 5% as trade worries outweighed strong cloud revenue growth
- Enphase Energy slashed its forecast, citing import tariffs on solar components and fears over expiring green energy tax credits
However, Coca-Cola remains confident. Despite global headwinds and tariff pressures, the company posted strong Q2 earnings and modestly raised its full-year outlook.
Retail tourism falls as international visitors avoid the US
Retail-dependent sectors are also feeling the heat. According to a Bloomberg analysis, foreign tourism has declined sharply amid Trump’s tariffs, tighter border controls, and global unease. US retailers, especially in coastal tourist hubs, are seeing fewer international shoppers—undercutting summer spending expectations.
Altman’s AI warning: “Entire job categories will disappear”
Meanwhile, technology looms large. OpenAI CEO Sam Altman warned at a recent Federal Reserve conference that AI will fundamentally disrupt the US economy. His forecasts included:
- Massive job loss in customer service and back-office roles
- AI outperforming doctors in diagnostics, challenging traditional healthcare models
- Authentication fraud becoming a major financial threat due to AI-generated voice and video spoofing
- A future where “people invent work” because AI fulfills most economic needs
Altman emphasized the need for immediate regulatory action and economic rethinking, warning that institutions using outdated authentication methods are at severe risk.
Key takeaways
- Trump’s tariff strategy is reshaping global trade, with ripple effects across agriculture, energy, autos, and tech
- Major trading partners are racing to cut deals, while others like Brazil and the EU brace for retaliation
- Businesses are split—some like Coca-Cola are adapting well, while others warn of deteriorating conditions
- Tourism is down, hitting US retailers
- AI is poised to accelerate economic transformation, potentially eliminating entire job sectors