Time rapidly running out for Trump as he urgently seeks a trade agreement.
Trade Deals: The Great Unknown
America's dealmaker-in-chief, President Donald Trump, has been talking about imminent trade deals for weeks now. With dozens of countries in active negotiations, one might expect announcements any day. But, as we've seen, Trump's predictions have a tendency to roll on into the next week, and the next.
On Sunday, aboard Air Force One, Trump hinted at potential announcements this week. But let's face it, he's said the same thing last week, and the week before that. His certainty is as refreshing as a hot summer's day in Antarctica.
Trump continues to sound a somber note, emphasizing that foreign countries have been "ripping off" the United States for years, and that any trade agreements will come only when he agrees to terms that benefit Americans. He maintains that the power is in his hands, not theirs. "We’re negotiating with many countries," he told reporters, "but at the end of this, I’ll set my own deals."
The promise of a trade deal has boosted some hopes and restored confidence in US financial markets. But as the weeks roll on with no deal in sight, the Trump administration risks inflicting serious economic damage. America's aggressive trade war has already sent the US economy into reverse. Last week's quarterly report on Gross Domestic Product showed America's first contraction since early 2022, as an otherwise-healthy economy was dragged down by companies stockpiling goods to get ahead of tariffs.
The slow-as-molasses pace of striking any kind of compromise on trade doesn't bode well for the ultimate prize: a détente with China. With tariffs of at least 145% on Chinese imports, and a 125% retaliatory tariff by China on US goods, trade has all but stopped with one of America's most important economic partners.
That means America is just days away from pandemic-like supply chain disruptions that could lead to higher prices and empty store shelves.
Where's the deal, Donald?
In a Time interview last month, Trump claimed to have made 200 trade deals already, later clarifying that they'll be done soon. Administration officials have said they're in advanced trade negotiations with more than a dozen countries. But actual trade deals take significant time – often years – to hash out. They typically involve incredibly complex agreements, delving into the minutiae of various goods and non-tariff barriers. They often involve significant political considerations, as various parties seek to protect voters with special interests.
Instead, any "deal" the Trump administration inks – whenever that happens – is almost certainly more like a memorandum of understanding. That may result in lower tariffs on one particular country's goods in the near term, but they'll probably do little that amounts to a substantial economic win for quite some time.
That's because Trump set a tight deadline to get this all done: The "reciprocal" tariffs that went into effect April 7 and were paused for 90 days on April 9 affect dozens of countries. So the clock runs out on July 8 – when punishing tariffs as high as 50% on dozens of nations are set to go back into effect.
India Leads the Charge
India is positioned to be among the first nations to finalize a trade pact with the US. Formal negotiations for a Bilateral Trade Agreement (BTA) began in February, with discussions emphasizing reciprocity, addressing India’s tariffs (up to 26% on some US goods)[1], and expanding market access for American exports[3]. Trump hinted at imminent deals, stating, “I’ll be setting the deal… in the next two or three weeks”[1][2]. India is positioning itself for a first-mover advantage.
US Vice President JD Vance met PM Modi to advance the COMPACT initiative, which integrates trade, technology, and defense collaboration[3].
As of now, Jacob Jensen, a trade policy analyst at the American Action Forum, remains skeptical, stating, "The 90-day tariff pause, which is now roughly 25% over, provides little time for the typical back-and-forth trade discussions that require months if not years to craft a trade deal."
Trump has said he would not extend the tariffs a second time – and, in fact, may act sooner to reinstate some tariffs on countries with whom his administration cannot reach an agreement, perhaps in a matter of a couple weeks.
And even if deals are ultimately completed with all countries, there’s no guarantee Trump would keep them.
The China Conundrum
Regardless of how many trading partners the United States reaches deals with, the one that really matters is China. And that appears to be going nowhere fast. The historically high tariff on China has effectively stopped all trade between the two countries. The number of cargo ships headed from China to the United States fell 60% in April, according to Flexport, a logistics and freight forwarding broker. JPMorgan estimates Chinese imports into the United States will plunge by as much as 80% by the second half of the year.
American consumers should expect pandemic-like disruptions as goods that were warehoused before tariffs took effect begin to run out over the next week or so, including higher prices, shortages, and empty store shelves.
Some signs point to cracks forming in the wall between the countries, however. China said last week it is "currently assessing" proposals by the United States to begin trade talks, in a subtle tone shift that could open the door for negotiations. And Trump last week reiterated that tariffs on Chinese imports to the United States will eventually be lowered.
But it would need to come down significantly – by more than half – for any real trade to recommence, trade experts say. And even then, the economic damage would be done – and it would be weeks or even months before American shelves would be replenished.
As the days tick by, the possibility of a trade deal slipping through Trump's fingers grows. And with it, the threat of economic collapse looms larger than ever. Maybe Trump's deal-making talents will shine through after all. But for now, all we can do is wait. And brace for impact.
- Politics and general news continue to revolve around the ongoing trade deals, with President Donald Trump asserting potential announcements are imminent.
- Despite Trump's repeated claims, the lack of any concrete deal has led to skepticism, as the slow pace of negotiations could inflict economic damage.
- In the realm of personal finance and investing, the promise of trade deals has had mixed effects, boosting some hopes but causing anxiety due to the uncertainty.
- Stock-market fluctuations and war-and-conflicts discussions have been largely impacted by the ongoing trade wars and tariff disputes, particularly with China.
- In this context, business leaders and politicians are closely monitoring the situation, as policy-and-legislation changes could significantly affect the global economy.
- India is one of the countries actively negotiating a trade deal with the US, with Vice President JD Vance traveling to India recently to advance the discussions.
- However, the ongoing trade war and high tariffs between the US and China continue to be a significant concern, potentially leading to economic disruptions such as empty store shelves and higher prices.
