The Trump administration’s 90-day pause on new tariffs for most major trading partners is set to expire any day now. This deadline is creating panic among investors and players in the international global trade. The hold started in April. That will all come to a head on August 1, when tariffs will start to be imposed for those countries that do not have an FTA with the United States. Treasury Secretary Scott Bessent indicated that letters would be sent to approximately a dozen countries detailing their tariff rates effective from this date.
Speaking on CNN’s “State of the Union,” Bessent said he was concerned about the approaching deadline. He noted that countries need to get a deal with the Trump administration by August 1. If they don’t accomplish this, they’ll automatically go back to the old tariff rates established on April 2.
“President Trump’s going to be sending letters to some of our trading partners saying that if you don’t move things along, then on August 1, you will boomerang back to your April 2 tariff level,” – Scott Bessent
Donald Trump then went on to affirm that yes, those letters were indeed signed, and they would go out the door on Monday. He made clear that tariffs wouldn’t start making money for the U.S. until August 1.
“They’ll start to pay on August 1. The money will start to come into the United States on August 1, in pretty much all cases,” – Donald Trump
With the deadline approaching, uncertainty about the possibility of new trade agreements has been the subject of much speculation. Bessent hinted that an announcement of major agreements might be on the horizon. He turned down the suggestion to frame the deadline as the other new tariff deadline. Rather, he contended it could help provide U.S. trading partners more time to negotiate more favorable terms.
“We are saying this is when it’s happening, if you want to speed things up, have at it; if you want to go back to the old rate that’s your choice,” – Scott Bessent
Bessent suggested big news on trade agreements might only be days away. Taken together, these announcements are likely to recast the approach of U.S. trade relations.
“I would expect to see several big announcements over the next couple of days,” – Scott Bessent
Alongside these developments, the administration has imposed a 20% tariff on imports from Vietnam as part of a new trade agreement. This complication takes trade tensions to another level of complexity as the deadline of August 1, 2023 approaches.