Trump Threatens 70% Tariffs on Goods if Trade Deals Fail by July 9

US President Donald Trump has announced that tariffs on various goods could increase if new trade agreements are not finalized by July 9. Starting August 1, tariffs will revert to the levels set in April, which could range from 10% to 70%. This decision comes after a 90-day reprieve from the so-called “reciprocal” levies, which were initially set to return on April 2 but were suspended to allow for trade talks.

Secretary Scott Bessent noted that this decision will significantly impact key sectors, potentially disrupting global supply chains. Industrial sectors are bracing for possible disruptions due to the anticipated tariff changes. Asian and European markets have already seen declines, anticipating higher costs. Resistance from global trading partners remains high amidst the uncertainty surrounding the potential tariff increases.

The financial implications of these tariffs are substantial. They could raise costs across various goods, impacting industries, politics, and supply chains. The use of stablecoins like USDT may increase if fiat tensions rise, with Bitcoin acting as a hedge. Previous tariff hikes under Trump's administration led to significant market upheavals, with Bitcoin perceived as a safe asset. Historical trends suggest increased crypto use amidst fiat uncertainties, especially in cross-border trade. Economic analysts indicate that tariffs might bolster the ‘digital gold’ narrative of Bitcoin. With pending agreements, stakeholders across industries are bracing for potential changes in market dynamics and financial outlooks.

Trump's tariffs are also expected to fill Treasury coffers at a time when investors are concerned about the sustainability of the nation’s debt, particularly after Congress passed a $3.4 trillion tax cut and spending package. The US economy has so far held up, with healthy hiring and tame inflation. However, the Federal Reserve is wary about the potential impact of tariffs on output in the coming months.

Trump's second-term rush to overhaul US trade policy has fueled uncertainty for markets and corporate supply-chain managers. The routine planning for production, inventories, hiring, inflation, and consumer demand has become challenging due to the fluctuating nature of the tariffs. Trump's threats against trade partners are likely to escalate in the coming days to increase leverage in talks, as seen with Japan.

The announcement effectively pushes back the tariffs that were originally set to return on April 2 but had been suspended until July 9. Trump had previously announced a complete three-month pause on all the “reciprocal” tariffs, insisting that historically high tariffs were here to stay. The deal announced with Vietnam calls for minimum tariffs of 20% on Vietnamese goods, double the rate throughout the three-month pause.

The US administration has warned that countries failing to secure agreements will receive formal notices of new tariffs—potentially as high as 70%. Trump signed tariff letters targeting 12 countries with specific rates of 20%, 25%, and 30% being considered. The move is part of Trump's broader strategy to overhaul US trade policy and address perceived imbalances in trade relationships.