As the White House extends its self-imposed negotiating deadlines, where do things stand?
Originally set to expire Wednesday, President Trump has extended the 90-day pause on the reciprocal tariffs first announced in a White House ceremony in early April.
The Trump administration has been working since then to secure trade deals with governments around the globe. But, now that the president has effectively pushed his reciprocal deadline to August 1, it’s a good opportunity to take stock of where the myriad trade negotiations stand.
So: Where do they stand?
There are many countries subject to tariff rates in addition to the blanket 10% tariff the administration announced on all imports back in April. That 10% rate remains in place while the White House remains in the early stages of inking deals.
So far we’ve seen a deal completed with the United Kingdom. The agreement signed requires London to remove “China from its supply chains in steel and other industries” and gives “American beef farmers a bigger bite of Britain’s market,” notes Politico, in exchange for the elimination of tariffs on British aircraft engines and parts and a lower tariff rate on autos. But the deal is not yet complete; the two sides have yet to come to an agreement on metals tariffs. Reuters reported last week that “Britain has avoided tariffs of up to 50% on steel and aluminum that the U.S. imposed on other countries earlier this month, but it could face elevated tariffs starting July 9 unless a deal is reached.” We’ll keep an eye on this one for further developments.
The administration also announced an agreement with Vietnam, and while specifics surrounding it are scarce, we have its broad outlines: U.S. products exported to Vietnam will have zero tariffs placed on them. In return, many of Vietnam’s exports will be subjected to a 20% rate instead of the 46% Trump announced for the country in April. What’s more, goods transshipped through Vietnam – for example, Chinese-made products that pass through the country in an effort to avoid U.S. duties – will be subjected to a 40% rate.
The administration is now sending letters to selected foreign governments warning of higher tariff rates for their exports if no deal is reached by the new August deadline. Various outlets have reported Trump agreed to the delay after U.S. Treasury Secretary Scott Bessent argued more deals could be completed with a little more time.
But this, of course, is not the only thing going on in the world of trade. As mentioned before, the 10% baseline tariff on virtually everything the U.S. imports (also announced in April) remains in place and, behind them and the slew of other country-specific and sectoral levies that are in place, the federal government collected roughly $30 billion in tariff revenue in June.
Those country-specific tariffs include those on Chinese imports. After a series of negotiating sessions, which began after both sides raised tariffs on the others’ goods to well over 100%, Washington and Beijing have taken a slight breather. Reuters notes “the average U.S. tariff on Chinese exports now stands at 51.1%, while the average Chinese duty on U.S. goods is 32.6%.” China has recently loosened export curbs on the supply of rare earth minerals that are crucial to advanced manufacturing industries, while the U.S. loosened controls over its technology exports to China. This could lead to further negotiations, and we’ve cautioned regularly against striking hasty deals and that any agreement must be comprehensive and enforceable. China, meanwhile, doesn’t like the U.S. cutting deals with countries like Vietnam that target its transshipped goods.
Even as negotiations with both countries continue separately, there are placeholder deals with Canada and Mexico, both major U.S. trading partners, that exclude USMCA-compliant items from tariffs. A statutory review of that big compact – which Trump signed in his first term as a successor to NAFTA – is scheduled for next year but all signs point to negotiations kicking off this fall.
And lastly, while there are plenty of sectoral tariffs rumored, there are others in place that we know of: a doubling of steel and aluminum imports, which the president announced nearly a month ago. That sets them both at 50%.
Between potential sectoral tariffs, dozens of different trade negotiations underway, and frequent announcements from the president himself, there are lots moving parts. So the bottom line is this: There are many more updates to come.
“My hope,” said Alliance for American Manufacturing President Scott Paul after U.S. employment data revealed that U.S. factories had shed 7,000 jobs in June, “is that the successful resolution of bilateral trade deals and tariff rates after months of shifts will help boost the fortunes of factories.”
Until then, we’ll continue to monitor developments on trade.