Post by : Minna

Photo: Reuters

US President Donald Trump announced that he will start sending official tariff letters to different countries on Monday, July 7. This comes just a few days before his deadline for these countries to make trade deals with the United States. Trump wants these countries to agree to fair trade terms, and if they do not agree, he plans to put higher taxes on the goods they sell to America.

First Batch of Letters Will Warn About Higher Tariffs

On Sunday, Trump said that he would send out the first batch of up to 15 letters. These letters will warn countries that if they do not make trade agreements soon, their goods will face much higher tariffs. These tariffs will return to the high levels that he announced earlier in April this year.

Tariffs Will Start on August 1

US Treasury Secretary Scott Bessent explained that even though the letters will go out this week, the higher tariffs will not start immediately. They will begin on August 1. This gives countries a little more time to discuss and finalise trade deals with America. Bessent said that this is not about changing the deadline but about giving some extra breathing space for negotiations.

Trump’s Strong Message on Social Media

On his social media platform, Trump wrote, “I am pleased to announce that the UNITED STATES TARIFF Letters, and/or Deals, with various Countries from around the World, will be delivered starting 12:00 P.M. (Eastern), Monday, July 7th.” Later, he also posted another message warning countries that support the BRICS group that they might have to pay an extra 10% tariff. BRICS is a group of countries including Brazil, Russia, India, China, and others, that are working together on economic matters.

Why is Trump Imposing Tariffs?

Back in April, Trump announced big tariffs on almost all goods coming into the US. He called this day “Liberation Day.” These tariffs included a 10% tax on imports from nearly all trading partners. Some countries, especially those in the European Union, were expected to face even higher rates. Trump said these tariffs were necessary to protect American industries and jobs from unfair competition.

Markets Reacted Strongly to Tariff Announcement

After Trump announced the tariffs in April, the global stock markets reacted negatively. Investors feared that these taxes would increase the prices of goods, reduce trade, and harm economic growth. Seeing this reaction, Trump decided to pause the tariffs for 90 days to give time for negotiations. This pause ends on Wednesday this week.

Limited Results from Negotiations So Far

Even though there has been a pause, only a few trade deals have been finalised so far. The US has made deals with Britain and Vietnam. With China, there is a temporary agreement to lower the very high taxes they had on each other’s products. However, many other countries are still discussing the terms with America.

Most Countries to Get Letters or Make Deals by July 9

Talking to reporters on Sunday before boarding Air Force One, Trump said that he thinks most countries will either receive these letters or finalise trade deals by July 9. He mentioned that some deals have already been agreed upon but did not give many details.

Tariffs Strategy: Maximum Pressure

US Commerce Secretary Howard Lutnick confirmed that the tariffs will officially start on August 1. He denied that this was a way of delaying the deadline. He explained that President Trump is setting the rates and deals right now. Treasury Secretary Bessent added that this date is not a new deadline but simply when the tariffs will begin. He said, “If you want to speed things up, have at it. If you want to go back to the old rate, that’s your choice.” This strategy is to apply “maximum pressure” to make countries agree to fair trade deals.

Talks with the European Union Going Well

Bessent also said that talks with the European Union are progressing well, although they started slowly. He hinted that there will be “several big announcements” about trade deals in the coming days but did not say which countries these deals will be with. Meanwhile, France’s finance minister said that he hopes France and the US can reach a deal soon to protect European businesses.

Japan and BRICS Countries Show Concerns

However, not all countries are happy with these tariffs. Japan’s Prime Minister Shigeru Ishiba said on Sunday that he “won’t easily compromise” in trade talks with America. The BRICS countries, which are fast-growing economies, held a meeting in Rio de Janeiro. They raised “serious concerns” that America’s import tariffs are unfair, illegal, and could damage global trade.

Trump Warns BRICS With Extra Tariffs

In response to the BRICS criticism, Trump warned that any country supporting BRICS’ “anti-American policies” would face an extra 10% tariff. He said there would be no exceptions to this rule.

What Comes Next?

This week is crucial for global trade as many countries will rush to make agreements before the new tariffs start. While some countries are hoping for fair deals, othersare preparing for the impact of higher taxes on their goods. President Trump believes these tariffs will protect American workers and industries, but many experts worry they could also hurt international trade and economic growth.