Former President Donald Trump was so confident in the new trade deals recently that he even bragged about them propelling economic growth. He assured attendees that “deal after deal” would soon begin to appear. As America’s economy confronts new and urgent challenges, skepticism increases about if and when these agreements will be realized.
At a press conference on May 16, Trump was optimistic and brazenly declarative about the impending agreements. At every turn he asserted that the administration had “200 countries” ready to commit in negotiations. He notably insisted that a public letter detailing the new business tariffs would be forthcoming in short order. This advance notice would give these countries notice of the fees needed to operate here in the United States.
“You’re going to see deal after deal, they’re going to start coming next week and the week after and the week after. We’ve got them in the hopper.” – Donald Trump
Trump has some reason to stay bullish on the economy. Yet, other economic indicators show that while the economy remains strong, it’s beginning to show signs of stress. Three years later, in 2025, real consumer spending has declined, leaving many economists worried about how long the current economic environment can last.
For more than two months, a cloud of doubt hung over the negotiations on the trade side. The discussion of imposing new tariffs on countries that fail to obtain better deals is picking up steam. Howard Lutnick, CEO of Cantor Fitzgerald, informed Bloomberg that at least ten deals would be unveiled imminently, yet the lack of concrete outcomes thus far raises questions about their actual arrival.
Michel Nies, an economist at Citi raised skepticism about the deals’ viability. In particular, he warned that they are already having disastrous long-term repercussions for the U.S. economy. He stressed that trading partners would likely retaliate against any new tariffs. Such steps would jeopardize U.S. economic growth and fiscal health.
“Trading partners taking retaliatory action could have a lasting impact on US output and, accordingly, public finances.” – Michel Nies
As the administration gears up for potential tariff implementations starting July 9, about 20 countries could see their “Liberation Day” tariff rates reinstated. When he made the announcement, Trump claimed that his administration would be reimposing tariffs. This measure would hit the hardest those countries that refuse to renegotiate new terms.
A point that many mainstream economists would take issue with is the long-term impact of these tariffs. Robert Ruggirello noted that “higher prices from tariffs may be starting to work their way through the economy,” suggesting that price inflation could follow as a consequence of these trade policies.
There are signs of an improving consumer sentiment, with the index bouncing back 16% this month as per the University of Michigan. As experts such as Brookings’ Justin Wolfers have pointed out, the prospects for a quick resolution to trade uncertainties should be dim. He added that recent bright-eyed optimism over resolving tariff disputes seems misplaced.
“The idea that uncertainty will be resolved early this summer appears to be completely dead. This means tariff aggression is not dead.” – Justin Wolfers