LEILA FADEL, HOST:
Many investors are breathing a sigh of relief after President Trump suspended some of his new tariffs for 90 days. The stock market soared following a series of sharp drops, but it's yet to fully recover from the damage done by Trump's trade war. And businesspeople are still trying to figure out what comes next. With me now is NPR's chief economics correspondent, Scott Horsley. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Leila.
FADEL: OK, it's pretty clear that the stock market was not happy with the president's tariffs. How are investors feeling now?
HORSLEY: The message from the market could not be any clearer. The market likes global trade and does not like anything that interferes with that. When President Trump was running interference with his steep tariffs, the market sank. When he suspended some of those tariffs, the market soared. The Dow Jones Industrial Average jumped more than 2,700 points yesterday. The S&P 500 index was up more than 8.5%. But keep in mind, that's only about two-thirds of what the market had lost since the president first announced these tariffs last Wednesday. So even with this partial ceasefire, the trade war has left a mark.
FADEL: But, Scott, not all tariffs are gone, right?
HORSLEY: That's right. There's still a 10% tariff on nearly everything the U.S. imports, and that's significantly higher than we were paying a few months ago. But the tariffs Trump has suspended would have been higher still. So let's say you go to the grocery store, and you're buying some Italian cheese to put on your pasta tonight. This time yesterday, there was a 20% import tax on that pecorino Romano. Today, the tariff is half of that. So are you grateful you can grate for less or disappointed that the tariff is still higher than it was before Trump took office?
I spoke to Philip Marfuggi, who runs The Ambriola Company. That's a big cheese importer in New Jersey. He would rather see no tariffs.
PHILIP MARFUGGI: Ideally, I would think it should be zero to zero and have free trade both ways between the U.S. and Europe and let the consumers decide whether they want to buy a domestic product or a European product.
HORSLEY: Americans are already unhappy about the cost of groceries. Even a 10% import tax is not going to help with that. Marfuggi says some companies may shift to smaller packages to try to mask the cost of these tariffs. And since imported cheese is going to cost more, he suspects domestic dairy producers will raise their cheese prices as well.
FADEL: OK, and Trump has not lowered the tax on goods from China. In fact, he's raised it. What impact is that going to have?
HORSLEY: When it comes to China, the trade war is still very much in force, and that is a headache for people like Bonnie Ross. She imports clothing from China to sell at discount stores like Burlington and DD's. Ross notes that over the last week, Trump's tariffs on Chinese goods have gone from 20% to 54% to a hundred and four percent and now a hundred and twenty-five percent.
BONNIE ROSS: And who knows where it's going to go from here? It's just insanity. And this is every industry - it's not just mine - toys, food, everything. There's nothing unaffected.
HORSLEY: Aside from the cost, which is significant, there's also just the uncertainty. Bonnie Ross typically places big clothing orders five months out so there's time to make and move the clothes across the ocean. How do you do business in an environment where you don't know what the tariff is going to be this afternoon, let alone during back-to-school shopping season next September?
ROSS: I don't think that they really understood the chaos that was going to ensue once they did all this without giving people enough time to plan. He's going to put a lot of people out of business, and people are going to lose their jobs. And I might be one of them.
HORSLEY: You know, for the moment, at least, investors are relieved by this 90-day pause on at least some of the president's tariffs, but it has been a very rocky seven days. And the road map could change at any moment with another stroke of the president's big Sharpie pen.
FADEL: NPR's Scott Horsley. I'm sure we'll be talking again soon. Thank you, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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