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Tariffs

Trump Threatens Higher Tariffs as Deadline for Trade Deals Nears

Strategic Insights

— 2 min read

President Trump is poised to rekindle economic pressure on America's trading partners this week, as the deadline for making trade deals elapses and the administration begins notifying countries of the tariffs they'll face on exports to the United States. For 90 days, the administration has been trying to reach trade pacts with dozens of countries in an attempt to lower economic barriers to U.S. exports.

Despite the president's initial reluctance, the administration has reached only two preliminary trade deals, with the United Kingdom and with Vietnam, which are scant on details and leave much to be worked out. More such limited trade deals could be announced in the coming days, including an initial trade framework with India. Countries that have so far agreed to trade deals, even preliminary handshake agreements, have qualified for lower tariff rates than what Mr. Trump threatened in April. Other countries that have not reached agreements are expected to face sharply higher tariffs, although the president and his advisers have recently implied that the tariffs may not go into effect until Aug. 1, rather than on July 9.

Key Takeaways:

  • The Trump administration has threatened higher tariff rates on a dozen foreign nations, including countries aligned with "the anti-American policies of BRICS".
  • The administration has reached only two preliminary trade deals, with the United Kingdom and Vietnam, which are scant on details and leave much to be worked out.
  • Countries that have agreed to trade deals will face lower tariff rates, while those that have not reached agreements will face sharply higher tariffs.
  • The administration has notified countries that tariffs will not go into effect until Aug. 1, rather than on July 9.
  • The president has threatened an additional 10 percent tariff against countries aligned with "the anti-American policies of BRICS".
  • The administration has reached out to dozens of countries to try to reach an agreement that would prevent the Trump administration from applying hefty tariffs to their exports.
  • U.S. manufacturers have shed roughly thousands of jobs, though growth in health care and other sectors has eclipsed those losses and resulted in strong employment data.
  • Tariffs remain extraordinarily high, creating a tax on both American consumers and importing businesses that economists expect to drag on economic activity.
  • Exports from the United Kingdom remain subject to a 10 percent universal tariff, which the Trump administration shows no signs of dropping, even for America's closest allies.
  • The European Union and Japan have proven more challenging to negotiate with, and have been reluctant to open their markets to American agricultural exports.
  • Foreign governments, including the European Union, have prepared retaliatory packages of tariffs on U.S. exports if hit by further American levies.

Statistics:

  • The Trump administration has been trying to reach trade pacts with dozens of countries for 90 days.
  • The administration has reached only two preliminary trade deals, with the United Kingdom and Vietnam.
  • Countries that have agreed to trade deals will face lower tariff rates, while those that have not reached agreements will face sharply higher tariffs.
  • Tariffs will not go into effect until Aug. 1, rather than on July 9.
  • The president has threatened an additional 10 percent tariff against countries aligned with "the anti-American policies of BRICS".
  • U.S. manufacturers have shed roughly thousands of jobs since the Trump administration took office.
  • Tariffs remain extraordinarily high, creating a tax on both American consumers and importing businesses.
  • Exports from the United Kingdom remain subject to a 10 percent universal tariff, which the Trump administration shows no signs of dropping, even for America's closest allies.
  • The European Union and Japan have been unwilling to open their markets to American agricultural exports.

Sources:

  • [The New York Times](https://www.nytimes.com/2022/07/04/business/trump-tariffs-trade-deals.html)
  • [Tyler Pager](https://www.nyt.com/by/tyler-pager)
  • [S&P Global Market Intelligence](https://www.spglobal.com/marketintelligence/)

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