As Tariff Deadline Looms, What to Know About Trump’s Trade Deals

TIME

Products flow in and products flow out of the country - that's the nature of trade in an increasingly globalized world. But U.S. President Trump is seeking to tip the financial scales of that business in favor of the United States. Tariffs have been a centerpiece of his economic policy. He's put pressure on trading partners around the world to sign trade deals which he believes have better terms for the US. The deadline to secure those agreements is 9 July.

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00:00Shending letters out on Monday having to do with the trade deals.

00:04It could be 12, maybe 15, you know Secretary of Commerce right here.

00:10And I guess Howard, I would say, it could be maybe as many as 15 or so.

00:15And they'll be going out on Monday, and some will go out on Tuesday and Wednesday.

00:20And we've made deals also, so we're going to have a combination of letters, and some deals have been made.

00:27We are expecting on Wednesday two things.

00:30One is perhaps a couple more trade deals.

00:33So far, the U.S. has only done one with the U.K., one with Vietnam, one with China, potentially one with the EU, one with India.

00:41But that's only five, albeit big trading partners, when this tariff actually affects over 150 countries.

00:47So the second thing we're expecting is actually there will be 100 letters that will be sent to about 100 countries,

00:54which will say that they're going to pay 10% tariffs and they don't need a trade deal.

01:00When the Trump administration invited negotiations on Liberation Day, when they announced the tariffs on April 2nd,

01:08it was always going to be a stretch as to how the U.S. could negotiate with over 150 countries.

01:1490 days to negotiate even a simple trade agreement is pretty challenging, and that's just with a few counterparties.

01:22So if you think about over 150 countries, I think it wasn't a surprise we probably were going to end up with more of a template,

01:30which is what we have, which is basically most small countries with not a big trade surplus of the U.S.

01:37will just pay the 10% across-the-board tariffs.

01:39So tariffs are a tax, so that means that what American consumers buy will be more expensive,

01:44so there's across-the-board 10% tariff if companies pass on even some portion of that.

01:51That means that costs are likely to go up, so most economists think that inflation will rise in the U.S.

01:57At the same time, the U.S. has passed a massive tax bill, which is going to cut taxes, mostly for people on higher incomes.

02:07So there's always a number of things that's going to come together to affect the American consumer,

02:12but I think the immediate impact is probably going to be pricier things you buy abroad

02:17and probably not a lot of domestic options to switch to straight away.

02:23I think this sort of approach to the tariffs that Trump has taken can be used as a negotiating tactic

02:28or a slightly fairer approach as he sees it to trading between the United States and other countries.

02:35And so to that end, you know, while he might make a big deal about the tariffs

02:41and, you know, how much revenue they might bring into the federal government,

02:45my sense is that he wouldn't actually want to see them implemented

02:49because of the costs that would then be passed on to consumers

02:52and the drag that they have on economic growth across the United States.

02:57So this is a new talk a little bit.

03:01So this is a new deal.

03:04I think we're going to take a big deal.

03:07So this is a new problem.

03:09I think it's going to be a better place if it turns out to be a big deal.

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