The Latest: US inflation ticked higher last month, as Trump’s latest tariff deadline nears
Jul 31, 2025, 7:53 AM
Cranes and shipping containers are seen at a port in Busan, South Korea, Thursday, July 31, 2025. (Gang Seon-bae/Yonhap via AP)
Credit: ASSOCIATED PRESS
(Gang Seon-bae/Yonhap via AP)
A key U.S. inflation gauge rose last month, in a sign that President Donald Trump’s broad-based tariffs are starting to lift prices for many goods.
Prices rose 2.6% in June compared with a year ago, the Commerce Department said on Thursday, up from an annual pace of 2.4% in May. Excluding the volatile food and energy categories, prices rose 2.8% in the past year, the same as the previous month, which was revised higher.
Meanwhile, Trump has announced a flurry of trade activity ahead of his latest deadline Friday to impose even steeper import taxes on goods coming from countries around the world. A handful of trade deals have trickled in — most recently with South Korea and Pakistan — but many details remain hazy. Thorny negotiations for most trading partners remain up in the air.
And, while Trump may have gotten his way with tariffs on some countries, his overhaul of American trade policy still faces a challenge in federal court.
Here’s the Latest:
The U.S. president on Truth Social suggested that he plans to do as little trade as possible with India and Russia.
“I don’t care what India does with Russia,” Trump posted. “They can take their dead economies down together, for all I care. We have done very little business with India, their Tariffs are too high, among the highest in the World. Likewise, Russia and the USA do almost no business together. Let’s keep it that way.”
Trump announced on Wednesday 25% tariffs on goods from India and additional penalties for India’s reliance on Russia for oil and military equipment. Trump also issued a warning to Dmitry Medvedev, the former Russian president, saying that he should “watch his words” and that he’s “entering very dangerous territory!”
Trump said Canada’s announcement it will recognize a Palestinian state “will make it very hard” for the U.S. to reach a trade agreement with its northern neighbor.
The threat posted in the early hours Thursday on Trump’s social media network is the latest way he has sought to use his trade war to coerce countries on unrelated issues and is a swing from the ambivalence he has expressed about other countries making such a move.
“Wow! Canada has just announced that it is backing statehood for Palestine,” Trump said in his post on Truth Social just past midnight. “That will make it very hard for us to make a Trade Deal with them. Oh’ Canada!!!”
The Republican president said this week that he didn’t mind British Prime Minister Keir Starmer taking a position on the issue of formally recognizing Palestinian statehood. And last week, he said that French President Emmanuel Macron’s similar move was “not going to change anything.”
▶ Read more about Trump’s trade talks with Canada.
The U.S. and Pakistan reached a trade agreement expected to allow Washington to help develop Pakistan’s largely untapped oil reserves and lower tariffs for the South Asian country, officials from both nations said Thursday.
“We have just concluded a deal with the country of Pakistan, whereby Pakistan and the United States will work together on developing their massive oil reserves,” Trump wrote on his Truth Social platform. “We are in the process of choosing the oil company that will lead this partnership.”
Pakistan’s Prime Minister Shehbaz Sharif welcomed the “long-awaited” deal and thanked Trump for playing a key role in finalizing it. Pakistan’s Finance Ministry said in a statement early Thursday the agreement aims to boost bilateral trade, expand market access, attract investment and foster cooperation in areas of mutual interest.
The deal includes a reduction in reciprocal tariffs, particularly on Pakistani exports to the U.S., the statement from the ministry said. A new figure wasn’t immediately provided.
▶ Read more about the Pakistan’s trade agreement with the U.S.
Trump may have gotten his way with tariffs on some countries, but his overhaul of American trade policy has not gone unchallenged. In May, a three-judge panel of the U.S. Court of International Trade agreed that Trump exceeded his powers when he declared a national emergency to plaster tariffs on imports from almost every country in the world.
Now, on Thursday, the 11 judges on the U.S. Court of Appeals for the Federal Circuit in Washington, which typically specializes in patent law, are scheduled to hear oral arguments from the Trump administration and from the states and businesses that want his sweeping import taxes struck down.
That court earlier allowed the federal government to continue collecting Trump’s tariffs as the case works its way through the judicial system.
The issues are so weighty — involving the president’s power to bypass Congress and impose taxes with huge economic consequences in the United States and abroad — that the case is widely expected to reach the U.S. Supreme Court, regardless of what the appeals court decides.
▶ Read more about the challenge in federal court.
India’s Trade Minister Piyush Goyal on Thursday said the Indian government is in talks with exporters, industries and other stakeholders to assess the impact of 25% import tariff imposed by the U.S. on Indian goods.
In a statement to the parliament, Goyal said the government will take all necessary steps to secure and advance the national interest. The minister said India has in the past decade transformed from being one of the fragile fives to the fastest growing major economy in the world.
Goyal’s comments were seen in contrast to Trump’s social media post early Thursday wherein he slammed India and Russia, saying “they can take their dead economies down together.”
India is currently the third biggest importer of oil after China and the United States, depending heavily on imported crude oil. Over 80% of India’s crude oil is imported.
Russia is the biggest supplier to India — followed by Iraq, Saudi Arabia, United Arab Emirates and the United States.
Earlier this month, the country’s crude processors were hit by the EU’s sanctions on Indian diesel imports made from Russian oil, with Nayara Energy, an Indo-Russian oil refining and marketing company specifically targeted with penalties.
“Whether India will stop importing from Russia, depends on what the penalty is. The country will weigh its options before deciding,” said Sangeeta Godbole, a former trade negotiator with three decades of experience in the Indian government. Godbole said the vagueness of the penalty threat issued by the U.S. might be deliberate. “It’s all so fluid right now. According to me, the only people we can turn to are the Middle-East countries but they are part of the OPEC+ just like Russia,” she added.
The Federation of Indian Chambers of Commerce and Industry said it was disappointed with the imposition of 25% import tariffs and an additional penalty on Indian goods by the U.S.
The “move is unfortunate and will have a clear bearing on our exports,” said Harsha Vardhan Agarwal, president of the industry body. Agarwal hoped the higher tariffs will be short-lived and the two countries finalize a bilateral trade agreement soon.
“India and U.S. have a long-standing partnership, which is strengthened by our deepening engagement across an array of areas from technology to defense to energy and advance manufacturing. There is a lot our two countries can achieve together,” Agarwal said in a statement late Wednesday.
A top South Korean official says the $350 billion investment fund announced earlier by Trump includes $150 billion for cooperation on the shipbuilding industry.
Kim Yong-beom, the presidential chief of staff for policy, told reporters in Seoul on Thursday that the $150 billion fund is “the most noteworthy” part of the deal, saying it covers cooperation on all major parts of the shipbuilding industry such as constructions, maintenances, repairs and overhauls of vessels.
He says South Korean companies have world-class shipbuilding capabilities and U.S. companies hold strengths in software sectors.
South Korea’s president hailed the trade deal announced by Trump Thursday, saying it would serve as a chance to further strengthen economic cooperation and military alliance with the United States.
In a Facebook post, Lee Jae Myung said the $350 billion investment fund is meant to solidify a foundation for bilateral cooperation on strategic industries. The fund will play a role of supporting the entrance to the U.S. market by South Korean companies in areas where they excel such as shipbuilding, semiconductors, secondary batteries, biotechnology and energy.
Lee also said the deal would remove uncertainty surrounding South Korea’s export environment as the U.S. 15% tariff for goods from South Korea is a lower or similar figure facing other major trade competitors.
“The government was only engaged in negotiations by placing a top priority on national interests,” Lee said. “It’s important to pull out a mutually beneficial agreement, rather than seeking unilateral benefits.”
