ING economists Inga Fechner and Carsten Brzeski: Recent Trump tariff rates letters extend deadline for deals from July 9 to August 1

ING economists Inga Fechner and Carsten Brzeski: Recent Trump tariff rates letters extend deadline for deals from July 9 to August 1

The Trump administration has extended the deadline for new trade deals from July 9 to August 1, as the U.S. prepares to impose higher tariffs on various countries. This extension comes as the administration steps up pressure on trading partners to finalize agreements before the new deadline. The decision adds a layer of uncertainty for businesses and consumers alike, as well as for America's trading partners.

The administration plans to start sending warning letters to countries on Monday, July 7, detailing the new tariff rates that will be imposed on August 1. This approach is designed to apply maximum pressure on other nations to reach a deal, according to Kevin Hassett, director of the White House National Economic Council [1].

The new deadline follows a 90-day pause on tariffs that was set to expire on July 9. The pause was implemented after the initial announcement of the tariffs in April, which threatened to overhaul the global economy and lead to broader trade wars. The negotiating window until July 9 has led to announced deals only with the United Kingdom and Vietnam.

The U.S. Treasury Secretary Scott Bessent has indicated that several big announcements of trade agreements could come in the next few days. He noted that the European Union had made good progress in its talks and that Trump would also send out letters to 100 smaller countries notifying them of the higher tariff rates [1].

The tariffs, which include a 10% base rate on most countries and additional duties ranging up to 50%, were initially announced in April. However, the effective date for all but the 10% tariff was delayed until July 9. The new deadline of August 1 offers countries an additional three-week reprieve, but also plunges importers into an extended period of uncertainty.

The administration has not specified which countries will receive the letters or the exact tariff rates that will be imposed. However, it is clear that the U.S. is applying significant pressure on its trading partners to reach a deal before the new deadline.

The tariff deadline extension comes amid ongoing trade negotiations with several nations, including India. A high-level Indian delegation led by chief negotiator Rajesh Agrawal has returned from Washington without reaching a final agreement on trade in agricultural and dairy products, which the U.S. is advocating for.

In addition to the tariff deadline extension, the Trump administration has announced plans to impose an extra 10% tariff on countries that align themselves with the anti-American policies of the BRICS bloc of developing nations. This move is seen as an attempt to further pressure trading partners to comply with U.S. demands.

The tariff deadline extension and the threat of higher tariffs have led to concerns about the potential impact on global trade and the U.S. economy. However, the administration has maintained that it is always willing to talk to other nations about trade and that the ultimate decision on whether to impose the tariffs will be made by President Trump.

References:
[1] https://www.cleveland.com/news/2025/07/trump-to-send-tariff-warning-letters-monday-ahead-of-august-1-deadline.html
[2] https://indiawest.com/trump-extends-tariff-deadline-to-august-1/
[3] https://www.theguardian.com/us-news/2025/jul/06/trump-tariff-delay