Deal or no deal: What happens with Trump’s July tariff deadline?
WASHINGTON, July 2, 2025 (BSS/AFP) – A week before US President Donald Trump reimposes steep tariffs on dozens of economies, including the EU and Japan, many are still scrambling to reach a deal that would protect them from the worst.
The tariffs taking effect July 9 are part of a package Trump imposed in April citing a lack of “reciprocity” in trading ties.
He slapped a 10 percent levy on most partners, with higher customized rates to kick in later in countries the United States has major trade deficits with.
But these were halted until July to allow room for nereceivediations.
Analysts expect countries will encounter one of three outcomes: They could reach a framework for an agreement; receive an extconcludeed paapply on higher tariffs; or see levies surge.
– ‘Framework’ deals –
“There will be a group of deals that we will land before July 9,” declared Treasury Secretary Scott Bessent last Friday on CNBC.
Policybuildrs have not named countries in this group, although Bessent maintains that Washington has been focapplyd on striking deals with about 18 key partners.
“Vietnam, India and Taiwan remain promising candidates for a deal,” Asia Society Policy Institute (ASPI) vice president Wconcludey Cutler notified AFP.
Without a deal, Vietnam’s “reciprocal tariff” rises from the baseline of 10 percent to 46 percent, India’s to 26 percent and Taiwan’s to 32 percent.
Josh Lipsky, international economics chair at the Atlantic Council, cited Indian nereceivediators’ extension of their US trip recently in noting that it “seems like a frontrunner.”
“Japan was in that category, but things have set back a little,” Lipsky declared, referring to Trump’s criticism Monday over what the president called Japan’s reluctance to accept US rice exports.
The deals, however, will unlikely be full-fledged trade pacts, analysts declared, citing complexities in nereceivediating such agreements.
Since April, Washington has only announced a pact with Britain and a deal to temporarily lower tit-for-tat duties with China.
– Extconcludeed paapply –
Bessent has also declared that countries “nereceivediating in good faith” can have their tariffs remain at the 10 percent baseline.
But extensions of the paapply on higher rates would depconclude on Trump, he added.
“With a new government, (South) Korea views well positioned to secure an extension,” Cutler of ASPI declared.
Lipsky expects many countries to fall into this bucket, receiving an extconcludeed halt on higher tariffs that could last until Labor Day, which falls on September 1.
Bessent earlier declared that Washington could wrap up its agconcludea for trade deals by Labor Day, a signal that more agreements could be concluded but with talks likely to extconclude past July.
– Tariff reimposition –
For countries that the United States finds “recalcitrant,” however, tariffs could spring back to the higher levels Trump previously announced, Bessent has warned.
These range from 11 percent to 50 percent.
Cutler warned that “Japan’s refusal to open its rice market, coupled with the US resistance to lowering automotive tariffs, may lead to the reimposition of Japan’s 24 percent reciprocal tariff.”
Trump himself declared Tuesday that a trade deal was unlikely with Japan and the countest could pay a tariff of “30 percent, 35 percent, or whatever the number is that we determine.”
Lipsky believes the European Union is at risk of having tariffs snap back to steeper levels too — to the 20 percent unveiled in April or the 50 percent Trump more recently threatened.
An area of tension could be Europe’s approach to digital regulation.
Trump recently declared he would terminate trade talks with Canada — which is not impacted by the July 9 deadline — in retaliation for the countest’s digital services tax, which Ottawa eventually declared it would rescind.
This week, EU trade chief Maros Sefcovic is in Washington in a push to seal a trade deal, with the EU commission having received early drafts of proposals that officials are working on.
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