The Trump administration's trade policy faces a critical test this week as a federal court weighs the legality of its sweeping tariffs.

President Trump has achieved the remarkable: raising tariffs by more than the notorious Smoot-Hawley Tariff Act of 1930, while—it appears—avoiding the destructive trade war that followed.Including the deal struck over the weekend with the European Union,

It’s a race against time for some of America’s top trading partners who are negotiating furiously to reach agreements by Aug. 1.

The economy was supposed to crumble. The trade war was expected to escalate out of control. Markets were forecast to plunge. None of that has happened. But Trump’s early trade victory may be short-lived.

WASHINGTON (Reuters) -U.S. President Donald Trump will make his trade deal decisions this week even as separate negotiations with China and the European Union continue, U.S. Commerce chief Howard Lutnick said on Tuesday ahead of Trump's self-imposed Aug. 1 deadline.

U.S. senators from both major parties plan to introduce bills this week targeting China over its treatment of minority groups, dissidents and Taiwan, emphasizing security and human rights as President Donald Trump focuses on trade with Beijing.

"We still believe the most likely outcome is slow growth and firm inflation: Not a recession, but a backdrop where the adverse effects of trade and immigration controls on growth outweigh the boost from deregulation and fiscal largesse," Morgan Stanley strategist Michael Zezas wrote.