The 90-day ultimatum set by President Donald Trump for countries to negotiate trade deals with the United States is nearing its climax, coinciding with the 12.01am US Eastern Time deadline on July 9. This situation poses significant risks for the global economy, as Trump’s announcement on April 2, labelled “Liberation Day”, outlined reciprocal tariffs that could soar to 50 per cent for some trading partners. These rates mark the highest tariffs imposed by the US in over a century, prompting economists to worry about the potential for a worldwide recession.
As these tariffs began affecting markets, a sell-off on Wall Street exacerbated fears, compelling Trump to pause for three months to allow countries more time for negotiations. Despite facing an initial backlash, US stocks rebounded and even reached new highs, with inflation remaining stable. However, renewed tariffs could jeopardise these gains.
After extensive negotiations, only three trade deals have emerged, with one involving Vietnam still in its early stages. Amidst this backdrop, the Trump administration has continued to claim that additional agreements are imminent, while simultaneously warning of potential tariff increases for nations that fail to secure deals. Officials have suggested reverting to earlier tariff levels or implementing even harsher rates.
The current climate remains ambiguous, with Trump holding considerable power over the next moves. He hinted at the possibility of imposing high tariffs, ranging from 10 to 70 per cent, with an emphasis on how countries treat the US affecting their tariff rates.
The newly proposed agreement with Vietnam—setting minimum tariffs at 20 per cent—raises concerns for other countries that may find it harder to negotiate lower rates despite reaching a trade accord. This strategic approach could align with Trump’s ongoing commitment to elevate tariffs globally, aiming to increase revenue and revive US manufacturing.
Experts react positively to the US-Vietnam deal, suggesting it may lead to more sustainable bilateral agreements and a clearer environment for investors, despite potential headline risks associated with trade negotiations. Looking ahead, it seems the US administration may prioritise economic stability, particularly in light of the upcoming midterm elections in 2026, reflecting a possible shift in focus from aggressive tariff policies to maintaining market confidence.