Just days after Donald Trump took his oath of office in 2017 and abandoned the behemoth Trans-Pacific Partnership trade agreement, the president’s trade czar, Peter Navarro, came to the Office of the United States Trade Representative with a big request: negotiate roughly a dozen stand-alone free trade agreements with about a dozen nations.
Only a handful of deals were made over the next four years.
Administration officials are now racing to avoid a repeat, on a much shorter timeline. And they are working with a new set of rules, with a president who says he’s willing to levy higher tariffs on partners or end negotiations entirely.
After months of back and forth, changing tariff rates, shifting deadlines and gradual progress on trade agreements, the path toward a remade global trade landscape is still murky.
“Here we are again with some very, even higher, expectations for what can be achieved in a relatively short period of time,” Michael Beeman, a USTR official during Trump’s first term, told NOTUS. “The atmosphere of hanging tariff threats over everyone’s head is a very different kind of dynamic than at that time.”
Trump’s tactics have yielded some results. His team has announced high-level framework deals with the United Kingdom, Vietnam and China, before the administration’s original July 9 deadline. The White House says there’s more to come.
But Trump is still far from the “90 deals in 90 days” mantra that multiple administration officials uttered throughout April.
Day 90 is technically Wednesday — on Monday, Trump formally extended the deadline to August. Having failed to craft those bespoke deals by the original deadline, the White House on Monday began releasing a series of letters that set tariff rates for 14 countries including Japan, South Korea, Malaysia and Kazakhstan.
“The rest of the world has it so good they’re dragging their heels,” Navarro told reporters at the White House on Monday when asked why trade deals have been slower to come to than originally advertised.
But Trump isn’t giving much away about what comes next. Asked by reporters Monday night at the White House if the new letters are a “final offer,” Trump said they were, “but if they call with a different offer and if I like it, we’ll do it.” He wasn’t much more concrete on the new August deadline, calling it “firm but not 100% firm.”
Even so, the pressure is on, both for Trump’s negotiators and all the countries looking to avoid steep U.S. tariffs. “The clock is ticking,” said Stephen Moore, an economist who remains in contact with Trump. He argued that the president was yielding results already, despite the inherent risk attached to the White House’s approach. “It’s a stare down, and it’s a game of chicken.”
That game of chicken will continue for at least another three weeks, injecting more uncertainty into the market and global economy. One former USTR official told NOTUS that the further delay should not be seen as a “safety period” for countries that have yet to make progress, but instead as a moment of heightened pressure to make a deal.
“I think this will still be interpreted as a signal that the timeline is getting shorter, and if they want to avoid at least the highest rates of tariffs, they’ll need to progress the conversations towards an agreement,” they said.
Tariffs have long been a cornerstone of Trump’s economic and foreign policy approach, with he and aides around him hailing tariffs as the key to establishing fair trade relationships.
Just days into his second term, Trump levied steep import taxes on Canada, Mexico and China, triggering a tit for tat that destabilized the global economy.
On April 2, which the White House proclaimed as “Liberation Day,” the administration imposed a 10% baseline tariff and reciprocal tariffs, some as high as 48%, in the name of balancing trade. A week later, the White House instituted a 90-day pause for most countries, to give other countries a chance to come to the table.
The rocky, back and forth has led to some mockery from financial investors. In May, Wall Street analysts gave a name to stock trades premised on the belief that Trump would back off from high tariffs: TACO — Trump Always Chickens Out. “You call that chickening out,” Trump said when reporters asked him about the name, “it’s called negotiation.”
The White House has been bullish that this frenzied approach will eventually yield dozens of trade deals that benefit the U.S. economy.
The deals that the administration has signed so far have been high-level framework agreements, as opposed to the traditional 100-page-plus formal deals that take months or even years to hammer out.
“Let’s remember what’s being announced here are not agreements. They’re agreements in principle. And agreements in principle is a very flexible term,“ said one former trade official who has negotiated larger agreements for multiple administrations.
They said it was “very plausible” that a number of countries could meet basic framework agreements before next month.
“‘Will you be making cuts to your tariffs on U.S. imports? Yes. Will you be making purchase agreements? Yes. Will you be cutting your nontariff barriers on XYZ products? Yes.’ After several rounds, those are the parameters of the deal,” they said.
The most comprehensive agreement the administration has so far is with the United Kingdom, known as the Economic Prosperity Deal. It removes some trade barriers between the two countries, opens up the UK to U.S. beef exports and imposes a 10% tariff on most goods from the UK. The UK government is still in the process of hammering out a deal with the U.S. on steel — currently, there is a 50% tariff on steel and aluminum imports.
The administration last week announced a deal with Vietnam that would, according to Trump, allow the U.S. to import goods to Vietnam with “ZERO Tariff.” A formal agreement with more details has yet to follow.
But it’s the administration’s negotiations with China that have been the most tumultuous. Officials from the two countries met in May and negotiated a deal to cool a tariff war that had been escalating for weeks. Another deal followed that would make it easier for the U.S. to acquire rare-earth materials from Chinese firms and leave U.S. tariffs on China at 30%. Beyond this, details on the agreement have been sparse.
It’s anybody’s guess which deal could come next.
“Nobody actually knows,” said Dan Mullaney, the former assistant U.S. trade representative for Europe and the Middle East, including during Trump’s last term. Mullaney suggested that a deal with the countries of the European Union, negotiating as a bloc, could be the next major announcement after EU Trade Commissioner Maroš Šefčovič was in town last week.
And the deals already out could work not only as leverage but provide a roadmap on what the U.S. is looking for from trading partners, several sources told NOTUS.
“It’s guidance,” Mullaney said. “The Vietnam case does show some heightened concern about nonmarket economy policies and practices and the practices of China. So that’s a signal. I think that those are important, which is why I think it would be interesting to see how much those end up in the other agreements.”
The letters the White House sent out Monday could offer another clue.
The White House tweaked some tariff levies from the initial April 2 announcement. For example, Japan’s tariff rate on “Liberation Day” was 24%, but Trump on Monday moved it to 25%. Malaysia’s also went from 24% to 25%. Kazakhstan’s went from 27% to 25%.
“If you see a lot of them clustered into one or two or three different rates, that may tell you that it’s more likely that that’s going to become a kind of long-term policy rather than a negotiating tactic,” said the former USTR official.
But if financial markets or trading partners were craving certainty, they won’t find it in these letters. And there are still several ongoing Section 232 trade investigations that could lead to more tariffs and potential retaliation.
“I don’t think these letters are providing anybody with certainty,” said a second former USTR official. “I think that it is unlikely that trading partners or businesses will get complete certainty in the near or even medium term.”