As the voluntary trade deadline approaches next week, President Trump is taking a tough stance, stepping back from discussions about extending the 90-day suspension that was initially described as a “mutual” agreement.
Just a week ago, he unveiled the outline for a trade deal with Vietnam. Yet, while Vietnam typically doesn’t challenge the US, Trump insists on determining tariff rates himself.
The market is already feeling the pressures leading up to the July 9 deadline, mirroring the instabilities seen after new tariff announcements for major trading partners on April 2.
Douglas Holtz-Aeakin, president of the Center Right American Action Forum, expressed concerns about this ongoing context, saying, “The key question is where he sets these rates. If he reverts to previous levels, we could see mutual tariffs hit around 70% of US trade again, like we did on April 2.”
He also mentioned that this could indicate a significant economic overreach that Trump should acknowledge.
In the weeks prior, Trump and his team claimed that several agreements were imminent, targeting a goal of 90 deals in 90 days. The recently announced Vietnam Agreement would set the tariff at 20%, following similar agreements with China and the UK.
White House spokesperson Kush Desai stated, “President Trump is committed to creating a fair playing field for American industries and workers through tariffs. Today’s announcement is evidence of that commitment.”
Trump, however, hinted that customs rates will be announced soon, warning Fox News’ Maria Bartiromo, “We don’t care; we’ll just send out a lot of numbers.”
The president pointed to Japan as an example of stalled negotiations, stating, “We’ve been in talks with Japan, but we aren’t sure if anything will happen. They have a very rigid approach. They’ve become used to being in a favorable position.”
He continued, noting the significant trade deficit with Japan, “It’s unfair to American workers.” There’s a lingering concern among experts that this hardline approach may push trading partners to turn toward other nations instead.
“New tariff strategies aimed at our allies during negotiations seem like a risky power play,” one expert remarked. “Those countries that have been cooperative from the start might feel discouraged.”
There are warnings that China could seize the moment by influencing US trading partners affected by the new tariffs instead of continuing negotiations.
A former official highlighted that China is actively spreading propaganda in Taiwan, claiming Americans can’t be relied upon, which could exacerbate tensions.
Following the blanket tariffs imposed by Trump in April, the markets reacted chaotically. A week later, he announced a 90-day suspension of these “mutual” tariffs, leaving a 10% rate in place for all countries amid pressure from Wall Street and other Republicans.
The administration hopes that, as this 90-day window closes, several agreements will come to fruition, particularly with India following the Vietnam deal.
Since last year’s election, Trump has leaned into the narrative that other nations are taking advantage of the US, setting tariffs based on trade deficits.
He commented, “The world seems to expect the US to withdraw from deals, and countries have been turning to China. I’m worried about being left out.”
However, some analysts, including Bruce Melman, who served under former President George W. Bush, suggest Trump might be using tough tactics to push for better deals.
“Trade negotiations are intricate and often prolonged. The White House aims to return to a more aggressive approach, hoping to hasten outcomes,” he noted, referencing Trump’s past strategies.
US-Canada trade talks resumed this week after Canada reconsidered its digital services tax, which had previously stalled negotiations. Melman expressed optimism, suggesting that Trump’s pressure could lead to positive outcomes similar to what Canada achieved or a shift in contracts with China.
Throughout this 90-day pause, the administration has varied its messaging to prepare Americans for potential price hikes due to tariffs, indicating that consumer spending habits may need to shift.
In May, Trump suggested that the US should adapt culturally to consumer spending and even implied that other nations were fortunate to be able to trade with the US, stating that only foreign entities have much to lose.
He remarked, “Some countries we don’t even allow to trade with us. Most decisions, we can make pretty simply, just by sending a letter. Essentially, it’s an honor to conduct business in the US.”
