While there have not been material changes in United States trade policy going back to the three-month pause of the White House’s reciprocal tariffs implemented on April 9, it stands to reason that will be soon coming to an end, with the pause set to expire on July 9. But it may not be the end that was initially expected, with various reports indicating the pause has been moved back to August 1.
As previously reported, the pause followed the White House’s April 2 announcement, which President Trump labeled as “Liberation Day,” in which he rolled out new, or increased, tariffs on nearly 60 U.S. trading partners, ranging from 10%-50%. President Trump said described this measure as a “Declaration of Economic Independence,” noting that for years Americans were forced to sit on the sidelines as other nations got rich and powerful, at the expense of the U.S., and stated that it is now the U.S.’s turn to prosper and use trillions of dollars to reduce taxes and pay down the country’s national debt.
In an April 9 social media message, though, President Trump said that the U.S. has changed course, in terms of the scope and timing of its tariff implementations, in which he stated that “more than 75 countries have called Representatives of the United States, including the Departments of Commerce, Treasury and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
And now, just days before the end of pause, the president said in another social media message that the U.S. tariff letters and, or, deals with various countries will be delivered on Monday, July 7, at 12:00 PM ET.
This development does not come as a complete surprise, as the White House has previously extended deadlines, for certain tariffs for kick in, before, including the aforementioned extension of the reciprocal tariffs, as well as tariffs on Canada and Mexico, which were moved from February 4 to February 5 and also delays on tariffs placed on the European Union from June 1 to July 9.
That was made clear in comments made by the administration, with press secretary Karoline Leavitt saying late last month that the July 9 deadline was no critical and more time could be provided and also Treasury Secretary Scott Bessent saying in recent days that while the pause legally ends on July 9, the new effective date for the increased tariffs is August 1, with negotiations for U.S. trade partners that have yet to make deals continuing until then.
In a LinkedIn post, Deborah Elms, Head of Trade Policy at the Hinrich Foundation in Singapore, observed that the first tariff letters to U.S. trading partners have been released.
“Goods from Japan and South Korea will be an extra 25% starting August 1,” wrote Elms. “Although the language is unusual, it appears that 25% is separate from sectoral tariffs, meaning that these apply to goods not otherwise covered by Section 232 like autos, steel and aluminum (which presumably remain at 25 and 50%). These replacement ‘reciprocal’ tariff rates nearly match those given to both countries by Trump on April 2. Neither letter refers to any commitments which may or may not have been discussed over the past 3 months. Trump warns that he reserves the right to change tariffs up or down at will.”
In his assessment of the trade and tariffs’ landscape, Keith Prather, Armada Corporate Intelligence Managing Director, explained the main thing he is seeing right now is a lot of pressure being applied to trading partners to hit that August deadline.
“My thoughts are that it coincides with the U.S. Appeals Court ruling on Tariffs (which could make the reciprocal tariffs illegal), and that might be why they set the August deadline and are threatening April 2-types of elevated tariffs as a risk (to push them to negotiate in earnest prior to the court ruling),” he said. “I think Vietnam came in too hot (20%), and it sounds like he just threatened Japan and South Korea with 25%. Those are worrisome levels. A blended U.S. tariff rate above 15% would really slow down economic growth—unless they can offset them with growth elsewhere. I think there’s a lot of noise out there and we don’t know enough yet…again. But as they announce more deals in July, we’ll get a better picture and know what to expect. Again, so far, I think things are coming in hot on the tariff front.”
This is a confusing situation, to say the least, for supply chain stakeholders. It has played out already, as was seen when tariffs on United States-bound imports from China climbed to 145%, effectively shuttering supply chains for various sectors and shippers for a period, following the early April pause through July, soon after the reciprocal tariffs were announced.
At the recent SMC3 Connections Conference in Salt Lake City, Elizabeth Lowe, a partner at Washington, D.C.-based Venable LLP, that with trade policies and tariff structures accelerating a shift, or structural re-set, in global trade, the subsequent changes are not likely to be irreversible but instead will be changes that are permitted to a certain extent.
One reason for that, she explained, was that in the case of China, section 301 tariffs placed on China have been in effect since 2018, during Trump’s first term, and were not removed by the Biden administration.
It is not difficult to see the impact of shifting trade policies, tariff levels, and uncertainty, when viewing it through the lens of U.S.-bound imports in May, which fell by around 35% annually. And that impact was not understated by Port of Los Angeles (POLA) Executive Director Gene Seroka in the port’s recent monthly media call.
“Unless long-term, comprehensive trade agreements are reached soon, we’ll likely see higher prices and less selection during the year-end holiday season,” he said. “The uncertainty created by fast-changing tariff policies has caused hardships for consumers, businesses and labor.”
