Trump's tariff pause nears expiration as global markets anticipate disruption

United News of India

3 days ago

Washington, D.C., July 6 (UNI) As the 90-day pause on President Donald Trump's sweeping new "reciprocal" tariff regime approaches its expiration at 12:01 a.m. ET (9-31 PM IST) on July 9, uncertainty hangs heavy over global markets, U.S. trade partners and investors alike.
Announced on April 2 and dubbed "Liberation Day" by the president, the new tariff schedule introduced "reciprocal" rates on imports, some of which reached an unprecedented 50%. The move was described by analysts as the most protectionist U.S. trade policy in over a century and prompted dire warning from economists about the potential for a cascading global slowdown.
As the tariffs went into effect on April 9, they sparked a sell-off on Wall Street and the bond market rebelled, forcing Trump to announce a three-month pause to give countries more time to solidify deals with the US, saying investors 'were getting a little bit yippy, a little afraid', reports CNN.
Since then, almost all goods the US imports have been subject to a minimum 10% tariff. Stocks, meanwhile, have not only recovered all those losses but have set multiple new record highs. And inflation has barely budged. But if tariffs start to rise again and inflation roars back, those gains could quickly get erased all over again.
Despite months of negotiations and high-profile diplomatic meetings, tangible progress remains minimal. Only three trade deals have been publicly announced and just one, an agreement with Vietnam, has moved into the implementation phase. Set to impose a 20% minimum tariff on Vietnamese goods, double the temporary rate but markedly below the originally proposed 46%, the agreement illustrates the administration's "anchor high, settle lower" negotiation method, the CNN report said.
'We can do whatever we want. We could extend it; we could make it shorter,' Trump recently said.
'I'd like to make it shorter. I'd like to just sent letters out to everybody, 'Congratulations, you're paying 25%.''
'We'll look at how a country treats us — are they good, are they not so good — some countries we don't care, we'll just send a high number out,' Trump also recently said.
On Friday, he said he'd begin sending letters over the coming days.
'They'll range in value from maybe 60% or 70% tariffs to 10% and 20% tariffs,' Trump said.
For many countries, such rates would deal an even bigger economic blow compared to the levels Trump announced in April. But countries may have the opportunity to still negotiate, given Trump said most new rates won't take effect until August 1.
The administration's unpredictability may be deliberate, a high-stakes gamble aimed at forcing trading partners into concessions. But analysts warn that it also undermines investor confidence and creates unnecessary volatility.
'On balance, we take the US-Vietnam accord as a positive step toward more durable bilateral deals for the US and toward greater clarity for investors,' Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management, said in a note last week.
'Headline risks around trade may persist as negotiations continue, but we think the market impact should moderate as President Trump's negotiating tactics become increasingly familiar,' he said.
'Ultimately, we expect the US administration to prioritize economic stability over more maximalist tariffs, especially ahead of the 2026 midterm elections.'
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