The Trump White House had ambitiously pledged to secure “90 deals in 90 days” following a partial pause in implementing what President Trump referred to as “reciprocal” tariffs. However, in reality, fewer than nine agreements are expected to be finalized by the administration’s initial deadline of July 9.
What’s particularly revealing is the decision to push that deadline back to August 1—with the possibility of further delays—suggesting a shift in momentum. It’s a classic “tell,” akin to a poker player inadvertently revealing a weak hand.
From the U.S. viewpoint, Treasury Secretary Scott Bessent emphasized that efforts have been concentrated on the 18 countries responsible for 95% of the nation’s trade deficit.
The upbeat letters being dispatched to America’s trade partners this week appear to be a rebranded version of the White House’s earlier “Liberation Day” message board. The proposed tariff rates remain largely unchanged from those announced on April 2, and the controversial logic—equating the size of a trade deficit with the total extent of “trade cheating”—continues to inform U.S. policy, albeit in a slightly altered form.
These announcements have been made without triggering the kind of market turmoil seen earlier this year, largely due to the added delay. Financial markets appear to be banking on a pattern of rolling postponements—sometimes referred to as “TACO,” or “Trump Always Chickens Out.” However, this expectation may encourage further stalling by all parties, potentially setting the stage for a renewed crisis.
The core issue remains the Trump administration’s continued failure to secure meaningful trade agreements. The letters sent to trade partners are widely seen as acknowledgments of this shortfall.
While the White House may be taking a tough stance, so are many of its counterparts. Japan and South Korea received the first two letters—communications that effectively unravel their trade arrangements with the U.S. Japan, in particular, has made little effort to conceal its frustration. The country’s finance minister even alluded to leveraging Japan’s status as the largest foreign holder of U.S. government debt—a position that could serve as powerful economic leverage.
The situation today mirrors the dynamics seen in April. Global markets continue to penalize the U.S. whenever the threat of a trade war intensifies, particularly when American retailers raise alarms about rising prices and potential supply shortages.
Meanwhile, a legal challenge is still moving through the court system—one that could ultimately deem the tariffs unlawful.
The global economy is now beginning to feel the tangible effects of a disrupted trade system.
The U.S. dollar has declined by 10% this year against a basket of major currencies—a sharp contrast to Treasury Secretary Scott Bessent’s earlier prediction during his confirmation hearing that a stronger dollar would help offset any inflationary pressures from tariffs. The reality has been the opposite.
Trade data is also shifting. After an initial surge in stockpiling ahead of tariff implementation, recent months have seen notable declines in trade volumes. Chinese exports to the U.S., for example, have fallen by 9.7% so far this year. However, China’s overall exports to other markets are rising: shipments to the UK are up 7.4%, to the ASEAN bloc up 12.2%, and to Africa up 18.9%.
Though these figures remain volatile, they align with expectations in a fragmented global trade environment.
At the same time, U.S. tariff revenues are surging, with May setting a record for receipts flowing into the Treasury. Yet as the U.S. erects a higher tariff wall, other nations are increasingly trading among themselves. Notable examples include new trade agreements between the UK and India, and between the EU and Canada.
The U.S.’s effective average tariff rate on imports has now reached approximately 15%—a dramatic rise from the 2–4% range that held steady for the past four decades. And this is before additional measures outlined in recent policy letters take effect.
For now, markets remain relatively calm—but that may not last.
