Trade deals and tariff deadline looms large

Summary

Marketplace Morning Report: Trade Deals and Tariff Deadline Looms Large

Release Date: July 7, 2025
Host: Sabri Benashore
Duration: Approximately 9 minutes

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Introduction

In this episode of Marketplace Morning Report, host Sabri Benashore delves into two pressing economic issues: the looming deadline for U.S. trade deals and the alarming rise in bankruptcies among older Americans. Through insightful discussions with experts Julia Coronado, Chris Farrell, Laurie Troinsky, and Pamela Foey, the episode explores the potential impacts of trade policies and the financial vulnerabilities faced by the aging population.

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1. Trade Deals and Tariff Deadlines

Deadline and Potential Outcomes

Sabri Benashore opens the discussion by addressing the critical deadline for international trade agreements. Nations worldwide must finalize their trade deals with the United States by Wednesday to avoid the reinstatement of previously paused high tariffs announced in April. However, there's uncertainty as the White House hints at possible delays, suggesting tariffs might not reimpose until August 1st.

Expert Insights with Julia Coronado

Sabri engages with Julia Coronado, founder and president of Macro Policy Perspectives and a professor at the University of Texas, Austin, to unpack the implications of the impending deadlines.

• Tariff Baselines and Economic Impact

  Julia explains, "We have been living with a universal 10% tariff and higher tariffs on China already. So that seems to be the floor. It implies a tariff on US imports on average of close to 15%." [01:43]

  She further elaborates on the financial repercussions, stating, "We are collecting tariff revenue worth roughly $300 billion a year at an annual rate already. So if we go higher from here, that means that tax on US Firms and consumers will go higher." [02:25]

• Timing of Economic Consequences

  When questioned about the timeline for these economic effects, Julia responds, "Right now we have seen very little pass through to final consumer prices. That usually takes a few months... They're being absorbed in profit margins now, but likely they're going to pass some of that along through higher prices over the summer." [02:34]

Summary of Trade Discussion

The conversation highlights that while current tariffs are significant, any increase would exacerbate costs for U.S. firms and consumers. The delayed implementation could mean a gradual adjustment period, but overall, higher tariffs are poised to impact the economy by increasing prices and reducing profit margins for businesses.

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2. Rising Bankruptcies Among Older Americans

Alarming Trends in Bankruptcy Filings

Transitioning to the second major topic, Sabri introduces the final segment of an ongoing series on the financial challenges faced by older Americans. With insights from Chris Farrell, Marketplace's senior economics contributor, and experts Laurie Troinsky and Pamela Foey, the discussion sheds light on the growing number of bankruptcies among individuals aged 65 and older.

• Statistical Overview

  Chris Farrell presents a stark increase in bankruptcy filings among older adults, noting, "The 65 year and older age group accounted for 4.5% of bankruptcy filers in 2001. By 2022, the share had risen to nearly 19%." [05:03]

• Contributing Factors

  Laurie Troinsky, Senior Director at AARP, identifies key factors:

  • "We're seeing a combination of a number of factors. One is increased longevity. People are living longer." [05:21]

  • "It's still very difficult to live on Social Security if you have no other source of income in retirement." [05:44]

  Pamela Foey, Professor at the University of Georgia School of Law, adds depth to the analysis:

  • "The shift over the past 40 years has redefined what it means to get older... and how that all ends up in bankruptcy, of course." [06:38]

  • She emphasizes the high costs of healthcare and the erosion of the social contract between workers and employers: "Employers in some ways don't take care of their employees as much... periods of unemployment mean that people use up their savings and little nest eggs are slowly drawn down." [07:17]

• Future Implications

  Looking ahead, Pamela warns, "There's another 10 years of people behind them who have been living through the same economic and social situations, who will soon be 60 and then 70 and will enter their retirement years with potentially even less..." [08:00]

Summary of Bankruptcy Discussion

The segment underscores a troubling trend where older Americans are increasingly facing financial insolvency. Factors such as longer lifespans, inadequate pension plans, reliance on Social Security, soaring healthcare costs, and diminished employer-based safety nets contribute to this vulnerability. The ease of accruing debt in the modern credit economy further exacerbates the situation, leading many seniors to bankruptcy as a last resort.

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Conclusion

This episode of Marketplace Morning Report effectively highlights two significant economic challenges: the critical decisions surrounding U.S. trade deals and the rising financial instability among older Americans. Through expert analysis and compelling statistics, Sabri Benashore provides listeners with a comprehensive understanding of these issues' current states and potential future impacts.

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Notable Quotes:

• "We have been living with a universal 10% tariff and higher tariffs on China already." — Julia Coronado [01:43]
• "Bankruptcies among older adults are increasing faster than among middle aged and younger adults." — Chris Farrell [05:03]
• "It's still very difficult to live on Social Security if you have no other source of income in retirement." — Laurie Troinsky [05:44]

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This summary is based on the transcript of the "Marketplace Morning Report" episode titled "Trade deals and tariff deadline looms large." For more in-depth coverage, listeners are encouraged to tune into the full episode.

Transcript

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[Sabri Benashore]

Wednesday is the deadline for trade deals and tariffs, but maybe not for Marketplace. I'm Sabri Ben, ashore in for David Brancaccio. Nations the world over have until Wednesday to agree to trade deals with the US or face the return of astronomically high tariffs announced in April and then paused. But the White House has signaled some wiggle room, saying tariffs might not actually come back until August 1st. Julia Coronado is founder and president of Macro Policy Perspectives and a professor at the University of Texas, Austin, and joins us to talk more about it. Hi Julia, Good morning. Where do you think we're going to land, you know, in terms of the deals we get and the actual tariff rates we get?

[Julia Coronado]

Well, let's remember that we have been living with a universal 10% tariff and higher tariffs on China already. So that seems to be the floor. It implies a tariff on US imports on average of close to 15%. And that's not nothing. We are collecting tariff revenue worth roughly $300 billion a year at an annual rate already. So if we go higher from here, that means that tax on US Firms and consumers will go higher and they may nudge a bit higher depending on the deals that have been struck or will be struck this week.

[Sabri Benashore]

When do you think that these consequences will show up? Because we have been waiting for them for a while, you know, in inflation data or maybe the labor market, and they haven't shown up yet.

[Julia Coronado]

Right now we have seen very little pass through to final consumer prices. That usually takes a few months. Right now it's going to be absorbed in profit margin. So we know the tariffs are already being collected. So somebody's bearing that cost. Right now it's the firms, but likely they're going to pass some of that along through higher prices over the summer.

[Sabri Benashore]

Julia Coronado, Founder and President of Macro Policy Perspectives, thank you as always.

[Julia Coronado]

My pleasure.

[Pamela Foey]

Foreign.

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[Sabri Benashore]

Now to the final installment in our ongoing series Buy Now, Pay later about the increasing number of older Americans retiring with debt today why more people 65 and older find themselves in bankruptcy court Marketplace's senior economics contributor Chris Farrell reports.

[Chris Farrell]

Bankruptcies among older adults are are increasing faster than among middle aged and younger adults. The 65 year and older age group accounted for 4.5% of bankruptcy filers in 2001. By 2022, the share had risen to nearly 19%.

[Laurie Troinsky]

We're seeing a combination of a number of factors. One is increased longevity. People are living longer.

[Chris Farrell]

Laurie Troinsky is Senior Director, Finance and Employment at aarp. In addition to longevity, she highlight decline in pensions. Most people don't have employer managed pension income to rely on in retirement.

[Laurie Troinsky]

And then there are other people who live and largely rely on Social Security. It's still very difficult to live on Social Security if you have no other source of income in retirement. So you look at these combinations of factors where people are living on a fixed income and they're living longer, it's going to stress someone's budget. And so I think people will turn to bankruptcy because it's their last resort.

[Chris Farrell]

The government and employer based social insurance safety net is shrinking. The risks associated with aging, lower income and higher health care bills have been offloaded from robust risk sharing institutions under fragile household balance sheets. Pamela Foey, professor at the University of Georgia School of Law, says the shift over the past 40 years has redefined.

[Pamela Foey]

What it means to get older, what it means to buy a home, what it means to struggle to have a car, what it means to have kids, what it means to lose your job, what it means to get sick, and how that all ends up in bankruptcy, of course.

[Chris Farrell]

Co author of the forthcoming book Debts Risk and Consumer Bankruptcy, Foie emphasizes two factors behind increased bankruptcies among older adults. First is the high cost of health care in health insurance. Even with Medicare, older adults face sharply rising medical bills. The other reason is the eroding social contract between workers and employers.

[Pamela Foey]

Employers in some ways don't take care of their employees as much so you don't have a job for life or for 20 years. Which means that the movement of people and the changing in jobs leads to a lot of risk and uncertainty as to what's going to happen in your life. And those periods of unemployment mean that people use up their savings and little nest eggs slowly are kind of drawn down and the ability to consistently save has gone away.

[Chris Farrell]

Add how the modern credit economy has made it easier to take on debt and it's hardly surprising that many older adults of modest means are at financial.

[Pamela Foey]

I am worried about what's going to happen in the future because I'm talking about seniors. But there's another 10 years of people behind them who have been living through the same economic and social situations, who will soon be 60 and then 70 and will enter their retirement years with potentially even less with the same health care costs and the same job problems, and I don't know what's going to happen to them.

[Chris Farrell]

A sobering thought. Odds are the next generation of indebted older adults will be even more financially vulnerable to unexpected setbacks than their parents. A Financial Inheritance nobody wants I'm Chris Farrell from Marketplace.

[Sabri Benashore]

Our Buy Now, Pay later project is in partnership with Next Avenue, a nonprofit news platform for older adults produced by Twin Cities PBS in New York. I'm Sabri Benishore with the Marketplace Warning.

[Pamela Foey]

Report.

[Sabri Benashore]

From APM American Public Media.

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[Pamela Foey]

Applause.