The world—and the media—has lost track of the number of times Donald Trump’s trade war has been on the verge of starting. But this time, says the U.S. president, he means business. “The August 1st deadline is the August 1st deadline,” he declared this Wednesday—perhaps in homage to Gertrude Stein (“a rose is a rose is a rose”). He did so in a message on his social media platform, Truth, written all in caps. “It stands strong, and will not be extended. A big day for America!!!”
So if he doesn’t change his mind again, Friday will mark the start of tariffs that Washington has unilaterally imposed on dozens of countries since Trump returned to the White House with his plans to reverse the globalization that the world’s leading power instigated for decades for its own benefit.
What exactly will happen on August 1st is, however, a matter fraught with unresolved mysteries, as the ongoing negotiations continue against the clock. Trump himself warned on Truth that his people were on Wednesday “very busy in the White House today working on Trade Deals. I have spoken with the leaders of many countries, all of whom want to make the United States “extremely happy,” he wrote.
In the late afternoon, he announced a pact with South Korea, the world’s thirteenth-largest economy, under which Seoul will face 15% tariffs on its exports to the United States, in addition to committing to other investments. The president also shared that he had just signed an agreement with Pakistan “to develop its massive oil reserves.” He did not provide further details about the deal.
Amidst all these twists and turns, with so much information missing on so many specific issues, one thing seems clear: at the risk of everything changing once again—or another last-minute postponement—the countries are divided into three groups.
There are those who have already reached their trade agreements, or rather, the principles of trade agreements, in these nearly 120 days. The United Kingdom, Japan, Indonesia and the European Union know what they’re up against and only have to — and this is no small matter — finalize the details of those pacts.
The second group includes partners who have received specific threats, either when Trump launched his tariff campaign via letter in early July, or following specific announcements by the U.S. president, the latest of which came this Wednesday with India (25% tariffs).
In the third group are those smaller partners with whom the United States has neither the time nor the urgency to negotiate: they will be subject to a universal rate, which Trump has vaguely stated is at least 15%.
According to Goldman Sachs, these last two groups represent 52% of U.S. imports and include two of the main trading partners: Mexico and Canada. Both face tariffs of 30% and 35%, respectively, for products not included in the USMCA, the North American free trade agreement whose renegotiation is pending. Mexican negotiators are confident, according to diplomatic sources in Washington, that a pact can be announced before Friday’s deadline.
These sources also say that everything depends, as almost always, on final approval from Trump, who could also order a postponement, as U.S. officials leading the talks with Beijing expect the president to do with China.
After two days of intense talks in Stockholm, Sweden, the two powers appear willing to continue talking before embarking on a cross-tariff war like the one that saw the United States impose a 145% levy on China in April, and China impose a 125% rate on the United States. Those figures were shelved after a round of negotiations in Geneva (30% versus 10%). Treasury Secretary Scott Bessent was scheduled to meet with Trump this Wednesday to convince him of the merits of a postponement.
The 15% universal tariff that Trump is threatening with this time is 5% more than the figure set after the U.S. president announced his ill-named “reciprocal tariffs” on April 2, standing on the White House lawn with a huge piece of cardboard in his hands. Those rates ranged from 49% for Cambodia to 20% for the EU.
A few days later, he lowered the rate to a general 10% and gave countries 90 days to negotiate, a deadline that was supposed to expire on July 9th, but which he himself extended to August 1st. These back-and-forths earned him the nickname TACO, which stands for “Trump Always Chickens Out.” It’s an irritating nickname, and perhaps that’s why he’s so insistent that this time he doesn’t intend to back down.
After ignoring the July 9 deadline, Trump sent letters to at least 25 trading partners with tariffs ranging from 20% to 50%, a figure that Brazil was hit with for non-trade reasons, given that the balance of trade between the two countries is, this time, favorable to the United States. Brazil country saw its tariffs quintupled as a form of pressure by the U.S. president to help his friend, former President Jair Bolsonaro, who is facing jail at a trial for for attempting a coup in January 2023. This Wednesday, that 50% threat became a reality with an executive order signed by Trump, which includes exceptions for some companies (such as the aeronautical company Embraer) and certain sectors: silicon, tin, wood pulp and precious metals, among others.
Aluminum, steel, and copper producers are in a separate category. These three sectors, as in the case of copper, will be slapped (if they haven’t already) with 50% tariffs on Friday, regardless of the agreements with each country. Cars and their components are also exempt, and will be subject to a 25% levy, except in the cases of Japan and the EU, whose manufacturers will benefit from a lower tariff: the 15% they have agreed upon for all other products.
For both Tokyo and Brussels, a new phase begins this August 1st: finalizing the details of the agreements, often phrased in terms that are too vague, if not almost impossible to fulfill. This is the case with the point according to which the EU commits to purchasing $750 billion in U..S energy and investing $600 billion in the United States by 2028, according to the White House. This investment is not binding on EU member states or companies, given that, according to the European Commission, there is only an “interest in investing.” As for the energy purchases set out in the agreement, analysts say they are unrealistic: the EU cannot force member states or companies to carry them out.
Other partners that have reached deals with the U.S., eight in total, are unsure of where to turn. The most striking case is Vietnam. Trump announced an agreement on July 2, which entails a 20% tariff on all imports from Hanoi, in exchange for the Asian country “opening up to U.S. trade.” Since then, no one has seen a single document about this pact. Not even Bessent himself.
On Tuesday, in an interview with CNBC, Bessent stated that he assumed the document existed and that he believed Jamieson Greer, the U.S. Trade Representative, “must have it somewhere.” These statements confirmed what the world already knew: that if anything defines the U.S. president’s trade policy, no matter how many triumphs he has managed to score, it is chaos and volatility.
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