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Tariffs

Trump Extends Trade Deadline, Threatens Tariffs on Major Trading Partners

Strategic Insights

— 1 min read

US President Donald Trump has extended the deadline for countries to negotiate trade deals with the US, avoiding steep tariffs that had unnerved Wall Street. White House press secretary Karoline Leavitt announced the extension of the trade deadline from July 9 to August 1, citing a desire to allow more time for talks. However, Trump also renewed his threat to impose 25% tariffs on imports of goods from Japan and South Korea, effective August 1. This development comes as countries across the world were preparing for the end of the 90-day pause on the steep levies Trump announced in April.

Key Takeaways:

  • Trump extended the deadline for countries to negotiate trade deals with the US from July 9 to August 1, avoiding steep tariffs that had unnerved Wall Street.
  • The president threatened to impose 25% tariffs on imports of goods from Japan and South Korea, effective August 1, citing a "major threat to our economy and indeed our National Security".
  • The proposed tariffs could be negotiated down, with Trump stating that if the countries opened their markets "we will, perhaps consider an adjustment ... These tariffs may be modified, upward or downward, depending on our relationship with your Country".
  • 12 other countries will receive signed letters from Trump outlining fresh tariff rates.
  • Sectoral tariffs on goods from Japan and South Korea, including a 25% tariff on autos and auto parts, remain in place.
  • Washington has national security probes that could lead to tariffs on a range of other goods and industries, including aerospace, pharmaceuticals, lumber, copper, chips, and consumer electronics.

Statistics:

  • 90-day pause on steep levies ended on July 9.
  • 25% tariffs on imports of goods from Japan and South Korea to take effect on August 1.
  • S&P 500 fell to session lows with a 0.9% decline at lunchtime in New York after the announcement of tariff rates.
  • Japan's yen and the Korean won traded 1.1% lower against the dollar.

Sources:

  • "Donald Trump has granted a threeweek reprieve for countries to negotiate trade deals with the US before reciprocal tariffs go into effect", The Washington Post, no date provided.
  • A US official confirmed that the goods that are already subject to sectoral tariffs, such as autos and metals, would not be affected by the fresh 25% rate in addition, The Washington Post, no date provided.
  • A US official, Edward Luce, page 15.

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