As the 90-day “reciprocal tariff” deadline imposed by the Donald Trump administration came and went, three things are now clear: One, that the India trade trade deal could take more time, perhaps getting pushed back closer to the new August 1 deadline now.
Two, given that trade agreements are extremely complex documents that often take years to finalise, an extension of the deadline is actually a positive thing for India and some of the others who’ve not been served letters on social media. Three, President Trump is reported to have decided to delay the implementation of his reciprocal tariffs to August 1 after key advisers, including Treasury Secretary Scott Bessent, told him he could get trade deals with more time, according to a WSJ story quoting people familiar with the matter. Evidently that seems to be the case.
Even this new cut-off date looks iffy, given that Trump vacillated while answering a query during Tuesday’s cabinet briefing to effectively convey that even the August 1 deadline was “not a 100% firm”. This walking back on this deadline is quite in tune with Trump’s past record. Is there even a real deadline, as Reuters seemed to suggest in a report, or is this just a negotiating stance conjured up by the Trump administration to keep countries on tenterhooks? Could well be the case. Much of his trade policy has been like a jazz solo: just improvise while playing! And with a half-life of less than ten days, the fickleness in Trump’s tariff policy is the only element of certainty in all of this madness.
’90 deals in 90 days’
In April, Trump’s trade adviser Peter Navarro had said that the administration would deliver “90 deals in 90 days,” a number that was subsequently tempered by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to about 12 trade deals. That too is an overestimation. Trump has so far reached three deals—with the UK, China, and Vietnam—but over Monday and Tuesday sent out new tariff rates for around two dozen countries. The letters are not deals, but more a threat. So the final tally is way short of the targets they’ve started out with.
Those who’ve ended up receiving letters include allies such as Japan and South Korea, smaller developing nations including Bangladesh, Cambodia and Laos, most of ASEAN and Brazil, which is facing a 50% tax on goods exports. Again, in Trumpian fashion, these tariffs were announced in letters that were shared on social media. According to Bessent, much of the focus of the administration in these 90 days has been on the 18 countries that are responsible for 95% of America’s trade deficit.
And as the 90-day pause expired Wednesday, it is clear that the Trump administration seems to be acknowledging that negotiating trade deals is time-consuming. Trade agreements typically take years to finalise, so an extension of the deadline now to August 1 came as no surprise. Navarro, on Monday outside the White House, blamed the dragged-out process on other countries for “dragging their heels.” As a result, three months after Trump announced the so-called reciprocal tariffs on nearly every country in the world, threatening to dramatically hike tariff rates if trade negotiations were not successful, his administration is effectively come back with three deals and about two dozen letters that he’s posted on social media, reiterating that he will slap more or less the same rates that he proposed in April if negotiations are not successful over the next couple of weeks. So, effectively, it’s back to square one after ninety days for a majority of countries!
Sanctity of Deals, Widening Scope
There are also question marks about the sanctity of any trade deal that this administration was to sign. A new BRICS tariff proposed on a whim, or fresh copper and pharma tariffs, high duties on strategic partners like Japan and South Korea or Trump now reneging on the terms of the USMCA deal that he himself signed with Canada and Mexico in his last term: they’re all indicative of the fickleness of any agreement signed by this administration. The future of US trade deals and their perceived sanctity remains vastly uncertain, with potential implications for global economic stability and cooperation. Businesses across the world are left hanging, waiting for some semblance of certainty. Global supply chain experts say that it is both expensive and cumbersome for companies to switch manufacturing to different countries. Given the frequent changes in the policy, it is almost impossible for companies to strategise.
Then there is also the substantial broadening of a group of duties on metals. While Trump spent most of his term already focusing on steel and aluminum imports, now he’s added copper to the mix. This is an important addition, given the centrality of copper to things such as the electricity grids, data centers and automobile manufacturing. That could hurt sentiments further.
© The Indian Express Pvt Ltd
