As the new Trump tariff deadline approaches, how are those deals going?

It’s just over a week before the three-month pause on sweeping tariffs announced by President Trump on ‘Liberation Day’ expires. Are the deals done?

As things stand, July 9 will see a renewed upending of the world trade order, as those countries that have not yet signed trade agreements with the Trump administration will face tariffs on their goods entering the US. The president has said that the deadline will not be extended, although letters of intent may be enough to avoid tariffs in lieu of firm trade deals.

“I would expect the White House will announce some number of frameworks that it’s going to call trade deals, but do not meet anyone’s ordinary understanding of that term,” said Tim Meyer, a professor at Duke University law school who specializes in international trade told Bloomberg.   

Some progress has been made, such as a framework for a new US-China agreement that was announced last week. This is mostly focused on rare earths minerals but the details are not fully known. However, this trading relationship has been given a longer deadline for an agreement to be signed – August 12.

Canada is another significant part of the tariff story and one that took a backwards turn as Ottawa announced that its digital services tax would go ahead. Although it affects Canadian and all foreign businesses that sell online in Canada, not just the US, although companies such as Amazon, Alphabet, and Meta would be among the hardest hit.

Trump was quick to respond Friday to Canada’s “egregious tax” and stating that “we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”

However, the Canadian government backed down over the weekend with finance minister Francois-Philippe Champagne posting: “Rescinding the DST will allow the negotiations to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.”

The risk of failing trade talks between the US and its neighbor is clear, but not just for those in the Great White North. US government data shows that Canada imported $477 billion from the US last year, while the US imported $440 billion from Canada.

Across the Atlantic, negotiations are ongoing with the significant trading bloc of the European Union, but there are concerns in Brussels that any agreement may be tilted in favor of the US. There is no guarantee that a deal can be done before next Tuesday’s tariff deadline.

However, a deal agreed with the UK has come into effect Monday. This includes slashing the tariffs on US imports of British made cars to 10% instead of the 27.5% previously imposed. There is also a significant change to the tariffs on steel and aluminum which is 25% for British metals instead of the 50% global tariff with hopes to reduce this to zero. Other goods imported from the UK will face a 10% tariff.

Despite relatively little progress on trade deals, investor sentiment is rising and US futures were higher early Monday. This is not all about trade though, as a rally last week was mostly driven by easing of geopolitical tensions and data highlighting the resilience of the US economy.