The situation: With President Trump’s so-called “reciprocal” tariff deadline—pushed from July 9 to August 1—fast approaching, the White House has announced the outlines of trade agreements with Indonesia, the Philippines, and Japan.

• These deals set tariff rates of 19% for Indonesia and the Philippines and 15% for Japan, alongside vague commitments to reduce barriers on US imports and little detail on enforcement.
• The message is powerful: The Overton window on trade policy has massively shifted. Steep tariffs are no longer a negotiating threat—they’re the new normal.
• The shift is dramatic: The overall effective US tariff rate has jumped from 2.3% in November, when Trump was elected, to 8.8% just seven months later, according to Penn Wharton’s Budget Model.
• The economic impact is just beginning to ripple across the supply chain, business margins, and consumer prices.

Why it matters: The dramatically higher tariff rates have sent customs revenues soaring this year; US customs has collected $99.6 billion in duties through July 10—a 111% YoY surge, according to Penn Wharton.

• Those costs are largely being paid by US businesses. For example, tariffs cost General Motors $1.1 billion and Stellantis €300 million ($325 million) in Q2 alone.
• For now, companies are absorbing a significant share of those costs rather than passing them on to consumers, which is leading to tighter margins. That’s reflected in the Producer Price Index, which shows a sharp slowdown in margin growth for wholesalers and retailers in recent months.
• Still, some of the burden is reaching consumers. A Wall Street Journal analysis of about 2,500 items on Amazon found rising prices on essentials like deodorant, protein shakes, and pet-care products. CNBC found similar hikes at Walmart on baby gear and home goods. These increases are likely just the beginning, as retailers deplete stockpiled inventory and confront steeper import costs.