Washington, D.C., July 8, 2025 – The Trump administration’s ambitious pledge to secure “90 deals in 90 days” following a partial pause on imposing reciprocal tariffs has encountered significant delays. As the initial deadline of July 9 passes, fewer than nine agreements have been finalized, prompting the White House to extend the timeframe to August 1 with the prospect of further postponements.
Intended Trade Breakthrough Fails to Materialize
In April, then-President Donald Trump announced a sweeping strategy aimed at addressing America’s trade deficits by negotiating deals with key trading partners while suspending planned tariffs. However, Treasury Secretary Scott Bessent confirmed this week that the administration’s focus has remained narrowly fixed on just 18 countries responsible for 95% of the U.S. trade deficit, rather than the broader scope implied by the original pledge.
“This approach reflects an effort to target the most substantial sources of trade imbalance,” Bessent said during his confirmation hearing. Despite this, the pace of negotiations has lagged significantly behind expectations.
Instead of accelerating trade liberalization, the White House has circulated letters reminiscent of the controversial “Liberation Day” blue board unveiled in April, reiterating existing tariff rates based on a deficit-weighted formula—still perceived by critics as a proxy for “trade cheating.”
Market Calm Masks Underlying Tensions
Unlike the market turbulence experienced earlier this year amid tariff announcements, the recent deadline extension has occurred with little immediate upheaval in financial markets. Analysts attribute this relative calm to growing investor expectations of further delays a phenomenon colloquially dubbed “TACO,” or Trump Always Chickens Out.
“Markets have become conditioned to expect rolling postponements, which dulls the shock of each announcement but potentially encourages prolonged uncertainty,” said Lina Chen, an international trade economist at the Peterson Institute for International Economics.
Yet, the risk remains that continued procrastination could ignite renewed friction and volatility, disrupting global supply chains and consumer prices.
Rising Frictions with Key U.S. Allies
The administration’s hardline stance appears to have strained relations with important partners, particularly Japan and South Korea, which received the first of these new demand letters. The documents effectively undermine pre-existing trade agreements, escalating tensions further.
Japan’s Finance Minister Shunichi Hasegawa openly expressed frustration with U.S. trade policy this week and hinted at leveraging Japan’s status as the largest foreign holder of U.S. government debt—valued at over $1.3 trillion—as diplomatic currency.
“This is a worrying development in what should be a strategic partnership,” Hasegawa stated. “We urge the United States to reconsider measures that could destabilize global trade relations.”
Such disputes underscore the continuing challenges in reconciling U.S. demands with the interests and economic realities of its allies.
Legal and Economic Implications of the Tariff Strategy
Beyond diplomacy, the Trump administration’s tariff rollout faces ongoing legal scrutiny. A number of court cases contend that these tariffs may violate World Trade Organization rules and U.S. trade law; outcomes of these lawsuits could force a rollback or recalibration of measures.
Meanwhile, the economic effects of tariff policies are increasingly evident. Contrary to Treasury Secretary Bessent’s expectations of an appreciating dollar mitigating tariff-induced inflation, the U.S. dollar has depreciated approximately 10% against major currencies this year, intensifying import costs.
Trade statistics reveal a complex pattern: Chinese exports to the U.S. have plunged nearly 10% in 2025, indicating the tariffs’ dampening effect. However, China’s total exports are up 6%, reflecting a strategic pivot toward alternative markets including the United Kingdom (up 7.4%), the Association of Southeast Asian Nations (ASEAN) bloc (up 12.2%), and Africa (up 18.9%).
Shifting Global Trade Dynamics
As the United States erects higher tariff barriers—now averaging about 15%, a stark increase from the historical 2%-4% levels of the last four decades—other countries appear to be recalibrating their trade relationships. Recent bilateral deals, such as the UK-India trade agreement and the European Union-Canada Comprehensive Economic and Trade Agreement (CETA), exemplify efforts to deepen regional cooperation and diversify supply chains.
“The Trump administration’s trade barriers risk isolating the U.S. from emerging global economic networks,” warned Michael Gallagher, professor of international economics at Georgetown University. “Others are seizing the opportunity to strengthen intra-regional trade and strategic partnerships.”
Revenue generated from tariffs, meanwhile, has reached record highs for the U.S. Treasury, with May collections hitting unprecedented levels. However, this comes amid fears over potential long-term damage to American manufacturers and consumers faced with higher input costs.
Uncertain Future for U.S. Trade Policy
The Trump administration’s challenges in delivering on its tariff and trade negotiation promises illustrate the difficulties of reshaping complex global commerce through unilateral measures. The delay in finalizing agreements, persistent pushback from allies, legal challenges, and evolving trade flows suggest that the path toward resolving America’s trade deficits will be prolonged and fraught.
As the August 1 deadline approaches, attention will focus on whether the White House can forge substantive deals or if further extensions will become the norm. Market analysts caution that the moderation in volatility observed so far could quickly unravel if hardline rhetoric intensifies or new tariffs are implemented.
“Uncertainty and unpredictability remain the dominant features of U.S. trade policy,” Chen added. “Businesses and governments worldwide must navigate these choppy waters carefully.”
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