President Donald Trump announced Thursday that his administration will begin notifying several U.S. trading partners of unilateral tariffs as high as 70%, marking a sharp escalation in global trade tensions. The tariffs, which will take effect on August 1, were revealed just as U.S. markets closed for the July 4 holiday.
“We’re going to start sending letters out to various countries starting tomorrow,” Trump told reporters. “They’ll range in value from maybe 60 or 70% tariffs to 10 and 20% tariffs.”
The administration’s 90-day pause on the stiff “reciprocal” tariffs, introduced in April, expires next week. The White House confirmed that the July 9 deadline is a self-imposed target to finalize notifications of the new rates.
Currently, most U.S. trading partners — excluding China — face a universal 10% levy. The newly announced tariffs represent a significant increase, surpassing all previously floated rates apart from those targeting China.
Room for Negotiation, But Retaliation Expected
Trump’s remarks left the door open for further negotiations with major trading partners, including the European Union, Japan, and South Korea.
“That’s the most interesting takeaway — it leaves room for negotiation,” said Inga Fechner, economist at ING, in a statement to the Wall Street Journal.
EU negotiators have struggled to make progress with the Trump administration and are now considering extending the current trade status to avoid additional tariff hikes. Without an agreement, tariffs on most EU imports to the U.S. could double from 10% to 20%, with some agri-food imports potentially facing a 17% tariff, according to EU sources.
Trade Talks Continue as Global Markets React
Negotiations between U.S. and EU officials are expected to continue into the weekend. A European Commission spokesperson confirmed that “progress was made” during the latest round of talks but that further discussions are needed.
Meanwhile, talks with Japan and South Korea, both priority targets for the Trump administration, have stalled, raising concerns in export-heavy Asian economies.
“Investors are now just waiting for July 9,” said Tony Sycamore, an analyst at IG. Asian equity markets have seen declines amid fears of the tariff fallout.
Truce with China, But Fragile
While the U.S. and China remain locked in a tense trade relationship, recent talks in London revived a fragile truce. Beijing is now processing export applications for certain controlled items, and the Trump administration has allowed GE Aerospace to resume engine deliveries to Chinese planemaker Comac. However, China has halted Boeing jet deliveries to its own airlines in response to U.S. actions.
Domestic Impact: Economic Bill Passed, Markets Rally
Despite the looming trade turmoil, U.S. markets closed higher on Thursday after the House narrowly passed Trump’s 869-page economic bill, which avoids a government default and boosts spending on border security and military operations, though it significantly adds to the national debt.
Stronger-than-expected job numbers also buoyed investor confidence, with all three major U.S. equity indexes rising in the shortened session.
“The U.S. economy is holding together better than most people expected,” Sycamore noted. “Markets can easily continue to do better from here.”
Trump has vowed to finalize trade agreements with 18 key partners by Labor Day, though skepticism remains about whether negotiations with major economies will succeed before the August 1 tariff deadline.
