Trump’s Trade Deals Come With Few Details to Flesh Out Big Numbers

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Aside from the tariff rates, much of the recent deals consist of “vague promises with large numbers attached that don’t have any mechanisms for follow-through,” said Alex Jacquez, who served on the Biden administration’s National Economic Council. “Nobody seems to believe that these checks as written are actually going to cash.”

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Russia Wildcard

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There’s more clarity around the tariff numbers, though they’re still in flux too.

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Trump will raise duties on most imports from Japan and the EU to 15% from the current 10%. Those partners will get a partial waiver on certain industry-specific US tariffs that carry higher rates worldwide – like for automobiles – but not on others like steel and aluminum, where talks on an exemption involving quotas continue.

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The revised auto tariffs on Japan and the EU are not yet finalized but are expected to take effect on Aug. 1, according to a White House official.

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Trump says there are more of these sectoral tariffs to come, and some of his recent deals may cause confusion by preempting yet-to-be-announced numbers.

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For instance, he pledged 15% tariffs for the EU on semiconductors and pharmaceuticals — two sectors where rates haven’t been finalized. A senior US official also said that Trump agreed to grant Japan whatever the lowest rate is for those two categories, but that commitment isn’t in the public US fact sheet.

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A White House official said that the lower 15% rates for pharmaceuticals and chips would only kick-in once higher levies Trump has threatened under Section 232 of the Trade Expansion Act take effect.

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‘Always Willing’

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Other already-announced deals have raised questions too – like the one with Vietnam earlier this month, which appears to have surprised officials in Hanoi with a tariff of 20%, higher than they were said to have agreed to. 

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US and Chinese negotiators, after two days of talks in Sweden this week, said they’re on track to extend the tariff truce between the two countries. A wildcard there is Trump’s threat to impose new charges on countries that buy energy from Russia.

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China is the biggest buyer of Russian oil — followed by India, which is still embroiled in talks with the US.

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The fate of the two biggest US trade partners also seems to be headed down to the wire. Trump has downplayed the chance of a deal with Canada, though Canadian Prime Minister Mark Carney shrugged that off. Both Canada and Mexico face tariff hikes this week, but they won’t apply across the board. Goods compliant with the USMCA trade pact are poised to maintain their current exemption, a major relief for both countries.

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Some critics say the administration’s deal-by-deal approach to tariff rates risks ending up as a patchwork that lacks coherence. US auto companies, for example, objected to the Japan agreement, saying imported cars that don’t have any US content are set to be taxed less than North American-built models that do.

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For all the unresolved questions, the administration is casting Aug. 1 as something of a milestone in setting rates after months of threats. It’s just not likely to be the final word in Trump’s rolling dealmaking.

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Several more pacts are very close, and tariff rates will either be agreed or imposed by Aug. 1, Kevin Hassett – head of the White House National Economic Council – said on Tuesday. But even after that, “people can continue to negotiate,” he said. “The president is always willing to negotiate.”

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—With assistance from Jennifer A. Dlouhy.

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