A looming deadline of July 9th has businesses across America holding their breath. That’s when a 90-day pause on a new wave of tariffs is set to expire, potentially unleashing significant economic disruption. The initial impression was one of decisive action, but the subseqent revelation reveals a much more complex and uncertain situation.
The tariffs, initially announced on April 2nd, have been described by the Trump administration as a necessary step to “rebalance” global trade. However, many economists fear they could backfire, leading to higher prices for consumers and hurting American businesses, particularly smaller ones. The move could very well dent financial markets. One local business owner, Sarah Miller, worried openly on X.com: “How am I supposed to plan for next quarter when I have no idea what my import costs will be NEXT WEEK?!”
As the deadline approaches, the administration has highlighted recent trade agreements with nations like the UK, Vietnam, and China. However, the details of these agreements remain murky, and many other countries remain in limbo. President Trump stated last week that the U.S. would begin notifying some nations about their impending tariff rates, but time is running out to secure comprehensive deals. He doesn’t plan to extend the July 9 deadline, leaving little time to clinch bilateral deals with dozens of other countries.
The proposed tariff structure is complex. Initially, a blanket 10% tariff would apply to imports from most nations, with some Asian countries facing an additional 49% duty. If these tariffs take effect, country-specific rates would be added on top of the 10% baseline, potentially leading to significant price increases. That 10% duty has been in effect since early April, while the so-called reciprocal rates have largely been temporarily suspended. Goods from Canada and Mexico have remained largely exempt thanks to the USMCA trade deal.
Chinese goods, previously hit with tariffs as high as 145%, currently face a 30% tariff. A failure to reach agreements by July 9th could see these rates skyrocket, impacting billions of dollars in goods from around the world. The White House has not yet commented on the possibility of further extensions or new deals before the deadline.
Given the intricacies of international trade, many experts believe a further extension of the tariff freeze is likely, at least for some countries.
“It can take a lot more time [than 90 days] to truly iron these things out,” says Clark Packard, a trade policy expert at the Cato Institute.
Packard suggests that nations perceived as negotiating “in good faith” might receive extensions, while those seen as less cooperative will face the full force of the tariffs. The revised perspective is that a complete implementation is unlikely.
“I think countries the administration believes are not bending at the knee or kissing the ring are likely going to face tariff snapbacks,” Packard added.
While higher tariffs could rattle investors and fuel inflation fears, extending the freeze prolongs uncertainty, which some argue is equally damaging. “The threat of tariffs, and this uncertainty, causes capital to sit on the sidelines. You cannot plan out a year from now if you if you can’t even figure out what your costs are going to be in a week,” Packard explained. “All of that causes uncertainty, and that’s the enemy of investment and broader economic growth, which are the kinds of things we want in the economy.”
Patrick Childress, an international trade attorney at Holland & Knight, predicts three potential outcomes:
- A small number of trade agreements finalized before the deadline.
- A continuation of the 10% baseline tariff while negotiations continue.
- Sharply higher tariffs for countries that fail to reach a deal or are deemed uncooperative.
“We don’t know which trading partners will fall into which of the three buckets, or how many trading partners will end up in each of three groups,” Childress stated. What followed was unexpected, as one local farmers’ cooperative had stockpiled fertilizer expecting tariffs to hike prices.
“If no action is taken by the executive, the higher rates automatically go into effect,” says David Murphy, a customs and trade attorney with GDLSK. “If he makes deals like he’s done with the U.K., that pulls them out of the whole mess — their deal stands. So if he comes up with other deals and announces them before July 9, they are in that bucket as well.”
For example, President Trump has threatened to impose a 50% tariff on goods from EU member states.
“If this happens, the EU will likely feel compelled to respond in kind, potentially sparking a full trade war and market instability,” analysts with Gavekal warned in a report.
Experts largely agree that a complete resolution by July 9th is unlikely, leaving considerable uncertainty in the air. The most likely scenario involves limited agreements and further extensions. “Indeed, Trump has stated that a longer pause would be ‘no big deal’. But given his unpredictability, we wouldn’t rule out the possibility that some countries face Liberation Day tariffs from next week,” analysts at Capital Economics noted. Some worry that the admnistration has already backed itself into a corner.
Some observers believe certain countries are unlikely to bend to U.S. pressure, regardless of the deadline. This includes the European Union, which represents a significant portion of U.S. exports and possesses considerable negotiating power.
Adding to the uncertainty, the U.S. Court of International Trade ruled in May that most of the administration’s tariffs were illegal. Although a federal appeals court has temporarily blocked this ruling, a final decision is pending. The legal challenge introduces another layer of complexity to the situation. This is just rediculous, complained one commenter on Facebook.
One local manufacturing company, “Precision Parts,” is already feeling the squeeze. According to their CFO, they have been forced to delay a major expansion project due to the uncertainty surrounding import costs. Supply chains are being disrupted, and businesses are struggling to adapt to the constantly shifting landscape. The current situation is a mess, stated a Linkedin post.