Monday, July 7
On April 8, President Trump paused all reciprocal tariffs for 90 days. That is set to expire on July 8.
As of this writing, the only trade deal we know about is with the U.K. That said, there may also be a deal with China, perhaps including 55% tariffs.
But China is putting a six-month limit on rare earth mineral export licenses, giving Beijing leverage if trade tensions rise again. Also, Treasury Secretary Scott Bessent said the tariff pause could be extended for countries or trading blocs (e.g., the European Union) negotiating in good faith.
This kicking the can down the road only increases uncertainty for American industries.
Between the possible China deal and a potentially extended tariff pause, trade-related risk and uncertainty keep hanging over businesses and markets. I wouldn’t be surprised if it lasted into 2026, which makes long-term planning and operations tougher.
If the president’s biggest pain point – China – is already resolved and other countries are making progress, it might be wise to expect an extended tariff pause for most countries. Such a temporary fix would likely please markets in the short term.
Meanwhile, the legality of the tariffs is still undecided as courts weigh different cases. Yet, markets inch closer to all-time highs. And so goes the can down the road.