This may be crunch week for U.S. President Donald Trump’s efforts to remake the global trading order, with a self-imposed July 9 deadline to reach deals with hundreds of countries expiring on Wednesday. That is, unless the new deadline is actually Aug. 1, as several administration officials suggested over the weekend.
Should the deadline pass with no new developments, it would potentially mean a return to the sky-high tariffs that Trump announced in early April before backing off a week later after U.S. stock and bond markets had an apoplexy. If the deadline is indeed extended, it could mean yet another month of trade purgatory.
And some trade shocks have already started: On Monday, Trump said he would levy tariffs of 25 percent on Japan and South Korea, two of the United States’ biggest trading partners in Asia and the bulwarks of the U.S. alliance system in that region. Trump made clear his transactional approach to trade and security in the closing of his letter to South Korean President Lee Jae-myung: “These Tariffs may be modified, upward or downward, depending on our relationship with your Country,” Trump wrote. The U.S. president sent additional letters to other countries threatening high tariff rates, and he is poised to formalize the delay to August for tariffs to kick in through an executive order.
Yet plenty of unanswered questions remain about Trump’s trade and tariff policy, adding uncertainty to a U.S. economy that is already seeing businesses struggle to plan investments or map supply chain strategies as well as consumers putting off spending.
And the looming uncertainty affects more than just Washington’s outlook, because U.S. trade policy affects almost the entire global economy. Oxford Economics said on Monday that the return of some degree of U.S. tariffs and other trade-distorting measures could mean “an unusually long contraction in world trade” into next year.
Here’s what we still don’t know just ahead of what is still officially the deadline for the return of what Trump has called his “Liberation Day” tariffs.
1. Is July 9 still the deadline?
Maybe. When Trump paused his so-called reciprocal tariffs on April 9 after markets melted down, he said he would give countries 90 days to negotiate new trade arrangements with the United States. That pause officially expires on Wednesday, July 9, and the Trump administration said it planned to begin sending out letters on Monday to a dozen or so countries outlining the return of punitive tariffs if ongoing trade talks aren’t wrapped up. White House chief economic advisor Kevin Hassett reiterated the importance of the July 9 deadline over the weekend, saying that he expected a flurry of last-minute deals.
But that may no longer be the true deadline, even if it always was a self-imposed one. Treasury Secretary Scott Bessent said over the weekend that countries actually have until Aug. 1 to “speed things up” in talks or face the return of the tariffs that were first unveiled on April 2, though he confusingly added that the new date is “not a new deadline.” In any event, the return of higher tariffs would become effective on Aug. 1, according to the latest administration statements.
At least for the larger countries and blocs with which the United States is still trying to reach some sort of trade deal—including the European Union, Japan, South Korea, and India—it appears, though, that Aug. 1 is the new date to circle.
2. What level would the tariffs revert to?
When he paused the controversial tariffs announced in April, Trump left a baseline of 10 percent duties on every country, but he said that countries would face the higher individual rates if they didn’t reach a deal with the United States by July 9. Those arbitrary rates were generally in the 20 percent to 30 percent range, but went as high as 50 percent (though one of the highest rates, a 46 percent levy on goods from Vietnam, may possibly be sort of resolved).
But on Friday, Trump told reporters that the tariffs, if they snap back, could range as high as 70 percent, though he didn’t specify on which country or countries. That is much higher than the already history-making tariffs he briefly levied in April, and it would likely deeply frighten markets that have fully recovered from their springtime shock.
Beyond Trump’s latest remarks, there is additional confusion about what tariff rate might apply in August if no deal is reached. The European Union, for instance, was initially tagged with 20 percent tariffs under Trump’s April plan. But he later said that EU exports would face a 50 percent tariff if no deal were reached, and that prospect continues to worry EU trade officials.
3. What kind of “deals” is the administration really making?
Despite assurances from the Trump administration that it could reach 90 trade deals in 90 days, so far, the United States has reached some degree of trade accommodation with only three countries: China, the United Kingdom, and Vietnam.
With China, the United States reached a limited truce in May, temporarily backing away from 145 percent tariffs to a still high but not trade-crushing level of 30 percent while China vowed to restore its exports of the rare-earth products that the United States desperately needs. But it’s not clear that even that trade truce is really sticking, and U.S. efforts to pressure other trade partners, such as Vietnam, to close down China’s ability to route trade through their countries could reinflame tensions.
The agreement between the United States and the United Kingdom affects a handful of sectors such as autos and aerospace, but it doesn’t address many pressing issues (such as the impact on the broader supply chains used for U.K. exports of heavily dutied steel) or amount to any sort of genuine trade agreement.
It’s not clear what the United States and Vietnam have agreed to. In theory, the United States got tariff-free access for its goods shipped into Vietnam while retaining a 20 percent duty on most Vietnamese exports and a 40 percent tax on “transshipments” from China and other third countries. Nobody knows how to define transshipment, though, and the details of the framework agreement are far from settled.
Deals with the rest of the world, which is just a couple of days away from the ostensible negotiating deadline, are still to be determined. Talks with Japan and South Korea have hit a wall. A deal with India, meant to be a Trump administration priority, appears to have tripped over familiar red lines. The European Union, the United States’ biggest trading partner, is still trying to reach a mini-deal that could stave off the worst of the tariff threats, with talks held between senior officials last week and over the weekend.
What remains unclear are the contours of the emerging agreement, including tariff relief for politically important sectors such as autos and expanded access into Europe for U.S. agricultural goods, as well as further European concessions on nontariff trade irritants that the United States continually flags, such as digital regulation and tax policy. Europe has prepared retaliatory tariffs that would impact a total of about $100 billion in goods from the United States to push back against the steel and aluminum duties and the April tariffs, but it has held fire while talks continue.
4. Are the so-called reciprocal tariffs the only duties to worry about?
Even with the possibility of another three weeks’ respite before the return of higher global tariffs, there are other U.S. trade barriers waiting to be deployed. The Commerce Department is continuing seven different investigations under Section 232, the national-security justification for tariffs that is already used for higher import taxes on steel, aluminum, and autos, and could be used to raise duties on copper, lumber, pharmaceuticals, semiconductors, trucks, jet engines, and critical minerals.
That means the Commerce Department could determine that imports of, say, Canadian softwood lumber represent a dire threat to U.S. national security; Trump would then have 90 days to act on that determination, which—if steel is prologue—would mean additional trade barriers on a whole lot more sectors.
As if that weren’t enough, Trump on responded on Sunday to the conclusion of the Brazil-based BRICS summit of developing nations by threatening additional 10 percent tariffs on any country “aligning” itself with BRICS in what Trump called its “anti-American” stance. (He earlier threatened 100 percent tariffs on any BRICS members that moved away from reliance on the U.S. dollar.)
It is unclear whether that nominal 10 percent tariff, which would seemingly apply not just to BRICS members—including China and India—but also, potentially, countries that merely support the bloc’s multilateral approach, would come on top of other, existing tariffs. Nor is it clear under what legal authority the Trump administration might seek to impose such tariffs.
5. Speaking of legal authority, weren’t the so-called reciprocal tariffs struck down in court?
They were, by a pair of judicial rulings in late May that deemed the administration’s use of emergency powers legislation from the Carter administration to be unlawful grounds for levying universal tariffs. But an appeals court ruled that the tariffs could remain in place during the appeals process; oral arguments in that case are scheduled for the end of July.
While courts have historically given the executive branch wide deference in matters of national security, the Trump administration’s sweeping and unprecedented invocation of a national economic emergency to justify global tariffs may test judicial patience. But the administration could further appeal any adverse ruling as well, meaning that the legality of the tariffs that may snap back on Aug. 1 will likely remain in question for months.
But uncertainty is the coin of Trump’s realm. And now it is simply here for longer.
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