Wow, what an interesting era it is in international trade! There’s just so much going on, so many variables, and it’s great to watch it all play out, particularly with the deadline of July 9th generating a sense of anticipation. President Trump’s trade strategy has heightened the focus on tariffs and negotiations for nations and businesses worldwide.
1. Vietnam Trade Agreement
The buzz for making new deals is exciting. President Trump recently unveiled a trade deal with Vietnam. On Truth Social, he posted, “It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam after speaking with To Lam, the Highly Respected General Secretary of the Communist Party of Vietnam.”
Vietnamese exports to the US will now be subjected to a 20% tariff, reduced from the previous 46% “Liberation Day” level. For transshipped goods from elsewhere into Vietnam, such as China, a particular 40% tariff will be imposed.
In exchange, the US obtained zero tariffs for American exports to Vietnam. Trump announced, “They will OPEN THEIR MARKET TO THE UNITED STATES,” providing “TOTAL ACCESS” to US products.
Vietnam is currently the 10th-largest US trading partner and seventh-largest import source, exporting more than $130 billion worth of goods. Retailers such as Nike and Lululemon have increasingly outsourced manufacturing there in response to heightening US-China tensions. The US trade deficit with Vietnam had already reached more than $50 billion through April.
2. Tensions with Japan
Negotiations on trade with Japan have been more difficult. Trump was doubtful of a deal, saying, “I doubt it with Japan. They’re very tough… very spoiled.” He pitched tariffs of “30%, 35%, or whatever the number is.”
Japan’s Prime Minister Shigeru Ishiba was aware of the problems, particularly for US automobiles, citing the problem of selling big, left-hand drive cars in Japan. Some think Ishiba may have to be tougher in negotiations.
Kurt Tong, a US veteran diplomat, threatened possible repercussions, observing, “There is some risk of a US tantrum… Japan may have no choice but to hit back.” Trump has suggested he’ll hold to the July 9th deadline and possibly send letters to other nations with tariff information.
3. EU Trade Talks
Headway is being made with the EU. The bloc indicated receptiveness to a general 10% tariff on exports but requested exceptions for critical sectors such as pharmaceuticals and semiconductors.
EU leaders called for immediate US tariff cuts as part of any agreement. Trade commissioner Maroš Šefčovič traveled to Washington with a directive to stand firm. Both are hopeful for a deal ahead of the July 9th deadline, given US tariffs ranging up to 50% hang over.
4. North America: Canada and the US
In North America, Canada cancelled its planned digital services tax on large US technology firms to get revived trade talks back on track. The White House said talks resumed following the threat of new tariffs by Trump.
Prime Minister Mark Carney and President Trump hope to seal the deal on the 21st of July. Canada’s finance ministry pushed for the call for a multilateral agreement, not unilateral taxation.
5. China Developments
The US and China have just agreed on a framework to pursue trade talks. Trump confirmed a ceasefire with China, which involves a reduction of tariffs over 90 days to negotiate a formal agreement.
Progress was made during a London meeting with US and Chinese representatives, including Secretary Howard Lutnick and Vice Premier He Lifeng. Lutnick stated, “They’re going to send us rare earths,” and US countermeasures would be removed in return.
Lutnick also set out a strategic plan, focusing on key trade partners and making phased deals to overcome the July 9th deadline.
Though there was gossip about “90 deals in 90 days,” few see that timeline as a reality. Nevertheless, incremental deals are keeping the heat on.
Trump’s messaging regarding the July 9th deadline has not been consistent. While Secretary Scott Bessent made much of the date, Trump indicated it might be shorter or longer, depending on what happened. Bessent went on to suggest Labor Day as a possible wrap-up date.
6. Contribution to US Businesses and Prices
The spill-over effect of these tariff adjustments is evident. Numerous companies are changing pricing tactics to account for rising costs.
Nike said it would increase prices as a result of estimated $1 billion in extra tariff expenses for fiscal year 2026. CFO Matthew Friend termed this a “new and meaningful cost headwind,” and price hikes would come in phases.
Macy’s also lowered its earnings forecast, citing tariffs. CEO Tony Spring characterized slow-and-steady price hikes, while CFO Adrian Mitchell described a “surgical” strategy increasing prices only in selected categories.
Shein and Temu posted price hike notices effective April 25, 2025, as a result of increasing operating costs related to changes in trade rules. Those retailers had already gained advantage from the de minimis rule, now tightened by Trump’s administration.
Ford is set to hike prices on new gasoline and electric vehicles beginning in May, according to company documents. The reason stated in a company memo was production-related cost changes related to tariffs.
Trump had also weighed giving autos a temporary exemption, but no general relief has been implemented. That means manufacturers will have to budget for increased expenses.
In the food industry, Conagra Brands CEO Sean Connolly stated tariffs on cocoa, palm oil, olive oil, and steel used in cans could increase prices. It’s another real-life instance of policy making it to consumer shelves.
7. Broader Economic Effects
Analysts put the cost of Trump’s tariffs at $82.3 billion to US employers. Goldman Sachs highlighted tariffs as one of the main risks to profit margins in future earnings seasons. Some will be passed on to consumers; others will fall on corporate margins.
June manufacturing data also indicated a slowdown. Reduced new orders and increased input costs indicate the effects of tariffs on planning operations.
8. Federal Reserve Perspective
Fed Chairman Jerome Powell recognized that tariffs held back interest rate reductions. Speaking at an ECB forum, he stated, “All inflation projections… rose significantly as a result of the tariffs.”
He added that although the economy in the US is robust, the full effect of tariffs is still making its way through. The Fed’s position is in contrast to the administration’s call for reduced rates.
9. Anecdotal Evidence and Personal Costs
Some tales demonstrate the surprise costs. CEO Robert Keeley paid an $11,000 tariff bill in 1.83 million Amex reward points a surprising cost example.
Tariffs even impact American holidays. This Fourth of July fireworks celebration was exempted by virtue of a 90-day China levies pause, but future events may be more expensive if these tariffs are reinstated.
10. Global Risks and Closing Thoughts
Other countries get pinched, too. Italy’s principal trade association threatened lost exports of $23.6 billion and 118,000 jobs if tariffs increase. Asian stock markets also have weakened with tariff uncertainty.
Leading up to the July 9th deadline, trade continues to be a dynamic, high-stakes arena. It is making deals, shifting strategies, and real-time reshaping of global dynamics. The second half of the year promises to be as hot and consequential.
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