Trump’s Economy Comes Into Focus as Second Half of ‘25 Begins

It’s Donald Trump’s economy now.

For the first six months of 2025, President Trump and his aides have said that they inherited a bad economy from former President Joe Biden and they should not be judged by economic data that was backward-looking.

But with the passage of Trump’s tax cut and spending bill late last week and the deadlines coming this week for his sweeping import tariffs – not to mention more money for his crackdown on immigration – the president enters the second half of 2025 with many of his most important economic plans in place.

This week begins with Trump administration officials now saying that the stated tariffs deadline of July 9 is being extended to Aug. 1, with Trump also threatening a group of countries including Brazil, India and China with an additional 10% tariff for what he describes as their anti-American policies. Trump said on Saturday that he has prepared letters for a dozen or so countries telling them what tariffs they will face. The only completed deals from his weeks of negotiations so far are basic trade frameworks with the U.K. and Vietnam.

“A substantial amount of uncertainty lingers over what will happen on Wednesday, as higher tariffs are set to snap back for around 56 trading partners,” Sam Bullard, managing director and senior economist at Wells Fargo’s corporate and investment banking unit, wrote on Sunday. “Last week, U.S. Treasury Secretary (Scott) Bessent indicated that trading partners could fall into one of three buckets: some being delayed, some being changed, and some being implemented. Secretary of Commerce (Howard) Lutnick noted that 10 to 12 countries could reach a deal by July 9.”

“We would not be surprised to see an extended pause for the key countries that are regarded as being in priority negotiations (including the European Union, Japan, India, South Korea, Australia and Taiwan),” Bullard added.

In terms of economic data, the week will offer little of consequence. A report from the National Federation of Independent Business on small business optimism out Tuesday is not likely to offer any meaningful news.

Then on Wednesday, the Federal Reserve will release the minutes of its June meeting where it held rates steady. Fed Chairman Jerome Powell is facing sharp criticism from Trump, who has branded him a “loser” for not lowering interest rates while also calling on him to resign before his term expires in 2026.

The battle with the Fed is central to Trump’s economic agenda as lower interest rates would help offset the cost of his “One Big Beautiful Bill Act,” which various estimates have said will add $3 trillion to $4 trillion to the nation’s $36 trillion debt. Trump is hoping that some of the increased spending Congress approved and the extension of the 2017 tax cuts will spur growth.

“Our fiscal condition is currently precarious, with debt-to-GDP soaring towards an all-time record, interest costs surging past nearly all other parts of the budget, and the Social Security and Medicare trust funds heading towards insolvency,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said after the bill’s passage last week. “This bill, which has been described by champions as ‘a start’ toward fiscal sustainability, would in fact make every single one of these problems worse – in some cases, dramatically worse.”

The government said that economic activity actually contracted by 0.5% in the first quarter as companies spent on imports (which count as a subtraction from growth) in advance of the tariffs.

One positive over the weekend was the decision by oil-exporting countries to increase their production beginning next month. That is likely to put downward pressure on oil prices in a possible reprieve at the gas pumps for American consumers.