Tariff Notifications by Trump’s Administration

President Trump announced that his administration will start notifying certain countries about unilateral tariffs set at 70%.

“We will begin sending out letters to various nations tomorrow,” Trump told reporters late Thursday.

“I think I might be making around 10 to 12 announcements tomorrow. I expect everything to be finalized by the 9th. Transitioning from 60% or 70% down to 10% and 20% tariffs seems worthwhile,” he added.

According to the president, these tariffs will start on August 1st.

The 90-day pause on the so-called “mutual” tariffs that was imposed in April will end on Wednesday.

The White House noted that Wednesday’s deadline is a voluntary target for issuing new fee notices.

Currently, most trading partners, apart from China, face a flat 10% tariff.

The proposed 70% tariff is higher than previous mutual rates, other than those aimed at China.

Before this, the highest discussed rate was 50%.

Trump’s comments suggest that the administration is open to further talks with major trading partners like the European Union, Japan, and South Korea.

As ING economist Inga Fechner stated, “This is the most notable insight, meaning he is leaving more space for negotiations.”

Fechner also warned that if the tariffs are enforced next week, significant trading partners might retaliate.

Negotiators from the European Union have not succeeded in breaking through during prior discussions with the Trump administration and might try to maintain the status quo to avoid increases in tariffs.

While the EU had hoped for a comprehensive trade agreement before Trump’s July 9 deadline, its prospects for a lighter agreement after discussions in Washington seem uncertain.

One EU committee informed its envoy that the US aims to “suspend” tariffs where initial agreements have been made.

Without a preliminary deal, broad US tariffs on most imports would rise to the specified rates set from the current 10% initiated by President Trump on April 2nd, with the EU seeing rates of 20%.

At one point, reports indicated that the US was imposing 17% tariffs on EU agricultural food imports.

Two EU diplomats mentioned that the committee plans to expand initial discussions and negotiate further.

Treasury Secretary Scott Bescent noted that negotiations would continue over the weekend.

A representative from the European Commission confirmed that they would re-engage with the US on critical matters this weekend.

Presently, the EU faces a 50% tariff on steel and aluminum exports to the US, along with 25% on automobiles and parts, and a 10% collection on most other items.

Trump mentioned that deals are already in place, including one between Britain and Vietnam, alongside a continuing ceasefire with China.

“We have a few other agreements, but my goal is to notify each country about the tariffs they are facing,” he said when queried about pending contracts.

Last week, Bescent indicated that the administration aims to finalize agreements with 18 major trading partners by Labor Day.

Recent talks in London involving US and Chinese officials have revived a fragile ceasefire, with China currently considering applications for exporting controlled items to the US.

In a notable change, the Trump administration has permitted the GE Aerospace joint venture to resume deliveries of engines to Chinese plan maker Comac, ending a ban that lasted since May.

However, China has halted the delivery of Boeing jets to its airlines.

While some progress is apparent with certain nations, negotiations between Japan and South Korea seem to have stalled, despite being key priorities for the administration.

For traders in Asia, the focus remains on the potential consequences of US tariffs, particularly for export-driven economies like Japan and South Korea.

“Investors are just holding tight until July 9th,” noted IG analyst Tony Sycamore, adding that the lack of optimism regarding trade negotiations has resulted in weaker stock markets in Asia.

The US dollar, experiencing its worst first half performance since 1973, saw a slight increase of 0.4% on Thursday before losing some of those gains on Friday amidst the ongoing uncertainty surrounding tariff announcements.

In Washington, the House narrowly passed Trump’s extensive economic bill late Thursday, which aims to prevent government defaults and authorizes significant spending on border security and military operations, though it adds to the national debt.

Nevertheless, US investors were supported by unexpectedly strong workloads.

All three major stock indices saw gains during Thursday’s shortened trading session.

“The US economy is perhaps more interconnected than many realize,” Sycamore stated.