Time has run out for some US trade partners looking to make deals ahead of President Trump’s July 9 deadline for tariffs to snap back to higher levels.

Letters will start going out to countries on Friday to notify them of the tariff rates they will face on exports to the US, Trump told reporters, to go into effect on Aug. 1. The first 10 or 12 letters sent out will be followed by similar batches.

“By the ninth they’ll be fully covered,” Trump said in reference to the deadline, per Bloomberg. “They’ll range in value from maybe 60% or 70% tariffs to 10% and 20% tariffs.”

The Trump team has so far been focused on hammering out trade deals, though it has succeeded in nailing only three pacts so far.

Treasury Secretary Scott Bessent has said around 100 partners would likely see a minimum “reciprocal” rate of 10% come next week, adding that he expects a “flurry” of deals to materialize before the deadline.

Here is where things stand with various partners:

China : The US has eased export restrictions on China for chip design software and ethane, a sign that trade tensions are calming between the two countries after they agreed in May to a framework to move toward a larger trade deal. Software firms like Synopsys (SNPS) and Cadence (CDNS) said they will now sell their chip design tools to Chinese customers again. The US also removed limits on ethane exports to China that it had set just weeks ago.

Vietnam: Trump on Wednesday said he had reached a trade deal with Vietnam, one that will see the country’s imports face a 20% tariff — lower than the 46% he had threatened in April. He also said Vietnamese goods would face a higher 40% tariff “on any transshipping” — when goods shipped from Vietnam originate from another country, like China. Many US goods will see no duty upon import to Vietnam.

Japan: Trump earlier this week said negotiations with Japan had soured, saying he would force Japan to accept higher tariffs of “30%, 35%, or whatever the number is that we determine.” Notably, that proposal is higher than the 24% “Liberation Day” level. “They’re very tough. You have to understand, they’re very spoiled,” he said.

US PRESIDENT Donald Trump said that his administration will start sending out letters to trading partners on Friday (Jul 4) setting unilateral tariff rates, which he said countries would have to begin paying on Aug 1.

Trump told reporters that about “10 or 12” letters would go out Friday, with additional letters coming “over the next few days”.

“I think by the ninth, they’ll be fully covered,” Trump added, referring to a Jul 9 deadline he initially set for countries to reach deals with the US to avoid higher import duties he has threatened. “They’ll range in value from maybe 60 or 70 per cent tariffs to 10 and 20 per cent tariffs,” he added.

The top tier of that range, if formalised, would be higher than any tariffs the president initially outlined during his “Liberation Day” rollout in early April.

Those ranged from a 10 per cent baseline tariff on most economies up to a maximum of 50 per cent. Trump didn’t elaborate on which countries would get the tariffs or whether that meant certain goods would be taxed at a higher rate than others.

Trump said that countries would “start to pay on Aug 1. The money will start going to come into the US on Aug 1”.

BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up

Trump has long threatened that if countries fail to reach deals with the US before next week’s deadline, he would simply impose rates on them, raising the stakes for trading partners who have rushed to secure agreements with his administration.

He initially announced his higher so-called “reciprocal” tariffs on Apr 2, but paused those for 90 days to allow countries time to negotiate, putting in place a 10 per cent rate during that interval.

So far, the Trump administration has announced deals with the UK and Vietnam and agreed to a truce with China that saw the world’s two largest economies ease tit-for-tat tariffs.

Asked Thursday if more deals were on the way, Trump responded that “we have a couple of other deals, but you know, my inclination is to send a letter out and say what tariffs they are going to be paying”.

“It’s much easier,” he said.

Trump announced the Vietnam deal on Wednesday, saying that the US would place a 20 per cent tariff on Vietnamese exports to the US and a 40 per cent rate on goods deemed transshipped through the nation – a reference to the practice whereby components from China and possibly other nations are routed through third countries on their way to the US.

While the rates are lower than the 46 per cent duty Trump imposed on Vietnam initially, they are higher than the universal 10 per cent level. And many of the particulars of the deal are still unclear, with the White House yet to release a term sheet or publish any proclamation codifying the agreement.

Still, investors who have eagerly anticipated any deals between the US and trading partners were buoyed Wednesday by the Vietnam announcement, which saw share prices of American manufacturers with facilities in the country rise.

Many major trading partners, however, such as Japan, South Korea and the European Union, are still working to finalise deals.

Trump has expressed optimism about reaching an agreement with India but has spoken harshly about the prospects of an accord with Japan, casting Tokyo as a difficult negotiating partner. He intensified his criticism this week, saying that Japan should be forced to “pay 30 per cent, 35 per cent or whatever the number is that we determine”.

On Tuesday, he had said he was not considering delaying next week’s deadline. Asked about any potential extension of talks, US Treasury Secretary Scott Bessent said on Thursday that Trump would make the final call.

“We are going to do what the president wants, and he’ll be the one to determine whether they are negotiating in good faith,” Bessent said on CNBC when asked whether the deadline might be lengthened. BLOOMBERG

Time has run out for some US trade partners looking to make deals ahead of President Trump’s July 9 deadline for tariffs to snap back to higher levels.

Letters will start going out to countries on Friday to notify them of the tariff rates they will face on exports to the US, Trump told reporters, to go into effect on Aug. 1. The first 10 or 12 letters sent out will be followed by similar batches.

“By the ninth they’ll be fully covered,” Trump said in reference to the deadline, per Bloomberg. “They’ll range in value from maybe 60% or 70% tariffs to 10% and 20% tariffs.”

The Trump team has so far been focused on hammering out trade deals, though it has succeeded in nailing only three pacts so far.

Treasury Secretary Scott Bessent has said around 100 partners would likely see a minimum “reciprocal” rate of 10% come next week, adding that he expects a “flurry” of deals to materialize before the deadline.

Here is where things stand with various partners:

China : The US has eased export restrictions on China for chip design software and ethane, a sign that trade tensions are calming between the two countries after they agreed in May to a framework to move toward a larger trade deal. Software firms like Synopsys (SNPS) and Cadence (CDNS) said they will now sell their chip design tools to Chinese customers again. The US also removed limits on ethane exports to China that it had set just weeks ago.

Vietnam: Trump on Wednesday said he had reached a trade deal with Vietnam, one that will see the country’s imports face a 20% tariff — lower than the 46% he had threatened in April. He also said Vietnamese goods would face a higher 40% tariff “on any transshipping” — when goods shipped from Vietnam originate from another country, like China. Many US goods will see no duty upon import to Vietnam.

Japan: Trump earlier this week said negotiations with Japan had soured, saying he would force Japan to accept higher tariffs of “30%, 35%, or whatever the number is that we determine.” Notably, that proposal is higher than the 24% “Liberation Day” level. “They’re very tough. You have to understand, they’re very spoiled,” he said.

Time has run out for some US trade partners looking to make deals ahead of President Trump’s July 9 deadline for tariffs to snap back to higher levels.

Letters will start going out to countries on Friday to notify them of the tariff rates they will face on exports to the US, Trump told reporters, to go into effect on Aug. 1. The first 10 or 12 letters sent out will be followed by similar batches.

“By the ninth they’ll be fully covered,” Trump said in reference to the deadline, per Bloomberg. “They’ll range in value from maybe 60% or 70% tariffs to 10% and 20% tariffs.”

The Trump team has so far been focused on hammering out trade deals, though it has succeeded in nailing only three pacts so far.

Treasury Secretary Scott Bessent has said around 100 partners would likely see a minimum “reciprocal” rate of 10% come next week, adding that he expects a “flurry” of deals to materialize before the deadline.

Here is where things stand with various partners:

China : The US has eased export restrictions on China for chip design software and ethane, a sign that trade tensions are calming between the two countries after they agreed in May to a framework to move toward a larger trade deal. Software firms like Synopsys (SNPS) and Cadence (CDNS) said they will now sell their chip design tools to Chinese customers again. The US also removed limits on ethane exports to China that it had set just weeks ago.

Vietnam: Trump on Wednesday said he had reached a trade deal with Vietnam, one that will see the country’s imports face a 20% tariff — lower than the 46% he had threatened in April. He also said Vietnamese goods would face a higher 40% tariff “on any transshipping” — when goods shipped from Vietnam originate from another country, like China. Many US goods will see no duty upon import to Vietnam.

Japan: Trump earlier this week said negotiations with Japan had soured, saying he would force Japan to accept higher tariffs of “30%, 35%, or whatever the number is that we determine.” Notably, that proposal is higher than the 24% “Liberation Day” level. “They’re very tough. You have to understand, they’re very spoiled,” he said.

Donald Trump has torn up the rule book in his second presidential term — defying the courts, the congress and the constitution.

But it’s his attempt to “make America wealthy again” by imposing tariffs on more than 180 countries and territories that have caused months of chaos, undermined business confidence in the United States, and pushed the world to the brink of a financial crisis.

With a three-month pause on the tariffs just days from expiring, leading experts in economics and international relations have told Four Corners they fear Mr Trump’s “unworkable” and “absurd” trade policies will create more instability and plunge the global economy into turmoil.

‘It’s a very strange strategy’

For nearly 40 years, Mr Trump has been declaring his love of tariffs, telling Playboy magazine in 1990 that foreign nations were to blame for “ripping our country apart”.

On the campaign trail in 2024, he described the word tariff as “the most beautiful word in the dictionary”.

While the president did introduce tariffs in his first term, they were minor compared to what he unleashed in his second term.

Dubbed “Liberation Day”, on April 2, Mr Trump stood on the White House lawn with an oversized chart outlining a series of tariffs the US would impose on dozens of its trading partners.

Donald Trump believes his “reciprocal tariffs” will help solve the US trade deficit. (Reuters: Carlos Barria )

The tariffs, he said, would address what he sees as a “national emergency”: the US’s trade deficit on goods, where the country imports more than it exports.

But economists argue that the trade policies are “unworkable” and aren’t the solution to Mr Trump’s perceived crisis.

“It’s been chaos,” says Paul Krugman, who won a Nobel Prize in economics for international trade policy.

” It’s just crazy. Not only economically destructive but actually completely unworkable. ”

The tariffs introduced by the Trump administration created an economic storm. (Four Corners)

Economist Warwick McKibbin says Mr Trump’s attempt to market the tariffs as “reciprocal” is grossly misguided.

“The whole idea of reciprocal tariffs is if someone’s punching me in the face, I’m going to punch myself in the face,” Professor McKibbin says.

“It’s a very strange strategy from an economic point of view.”

In the weeks that followed his announcement, Mr Trump paused, backed down, escalated and de-escalated dozens of tariffs.

The chaos that unfolded saw many public policy experts question whether there is a coherent plan behind the president’s trade strategy.

“There’s nothing about Donald Trump’s policymaking that looks even remotely well thought out,” says Evan Medeiros, former chief adviser on the Asia-Pacific to president Barack Obama.

“He’s somebody that has had a variety of ideas for a very long time. One of them is that our trading partners cheat us, and we need to use tariffs to remedy that situation.

” He got his wish, only to realise it’s completely unsustainable. ”

Donald Trump temporarily backed down on his highest tariffs after they sent global financial markets into meltdown. (Reuters: Leah Millis)

Dodging a descent into disaster

For his second presidential term, Mr Trump has curated a cabinet and team of advisers that either agree with him or buckle to his will.

“The Trump administration operates much more like a royal court,” Professor Medeiros says.

” You have a king, you have various concentric circles of courtiers around them, and everybody sort of shuffles in and out of the Oval Office wanting to hear the musings of the king and just implement it. ”

One of the key architects of Mr Trump’s tariffs policy is his senior counsellor for trade and manufacturing Peter Navarro.

Mr Navarro is a controversial figure. He claimed the 2020 election was stolen and worked on a plan to get the result overturned.

He also served four months in prison for contempt of Congress for refusing to comply with a subpoena over the investigation into the January 6 attacks on the US Capitol.

A former Democrat, Mr Navarro has written a series of books focusing on what he sees as the threat that China poses to the rest of the world. He has described the country as the world’s largest pirate nation and its biggest drug dealer.

Australian academic Tessa Morris-Suzuki exposed Mr Navarro for inventing an author called Ron Vara (an anagram of his last name). She says the fictitious Vara was cited at least 15 times in five different books.

“There are days when Peter Navarro, who is a radical protectionist, perhaps the only economist in the world who agrees with Trump’s idea of reciprocal tariffs, gets into the Oval Office and has the president’s ear,” economic historian Sir Niall Ferguson says.

Peter Navarro is one of the key architects of Donald Trump’s trade policies. (Reuters: Kevin Lamarque)

In the days after liberation day, financial markets were in freefall, and the president’s decision to introduce tariffs triggered a sell-off in the US bond market — signalling that investors thought holding US government bonds was becoming increasingly risky in the economic environment.

“Once we started to see the bond markets start to rattle … that was a fairly clear indication that we were on the edge of a cliff,” Professor McKibbin says.

” It would’ve been a disaster that would’ve spread very quickly to most countries. ”

It was only when heavy hitters inside the cabinet seized on Mr Navarro’s absence from the Oval Office on April 9 that the crisis on the bond market was averted.

“Navarro had in effect, been locked in a broom cupboard and the Treasury Secretary Scott Bessent and the Commerce Secretary Howard Lutnick got into the Oval Office, cornered Trump and said, ‘You’ve got to do something, you’ve got to postpone these tariffs because we’re about to blow up the global financial markets,'” Sir Niall says.

After that meeting, Mr Trump announced a pause on the reciprocal tariffs — imports from all countries except China would attract a 10 per cent tariff for 90 days — to allow individual trade deals to be negotiated.

Tariffs remained in place on steel, aluminium, cars and automotive parts, while the US later placed a 145 per cent tariff on Chinese imports. China retaliated with its own 125 per cent tariff on US imports — escalating the trade war between the world’s two largest economies.

Achieving the impossible

Mr Trump has used various rationales for introducing his tariffs — including to raise revenue, to balance the trade deficit, to bring back manufacturing to the US, and as a negotiating tool for trade agreements with other nations.

“Basically the policy is going to fail,” Professor Krugman says.

“If you impose a lot of tariffs, they’ll have much less impact on the trade balance than Trump thinks because they will make America a less attractive place to invest.

“If less capital comes in, then that will probably mean a weaker dollar and a slightly less negative trade balance.”

Professor Paul Krugman believes Trump’s tariffs will backfire on the US economy. (Four Corners: Ryan Sheridan)

As for whether tariff revenue would help balance the federal budget as Mr Trump has claimed, Professor Krugman says that’s not going to happen.

“Trump likes to say that, back in the 19th century, we paid for the government with tariff revenue. Yeah. We also had a government that had no social security, no Medicare, and barely had an army,” he says.

” If you’re willing to have a McKinley (US President 1897-1901) sized government, we could pay for it with tariffs. ”

Sir Niall says Mr Trump wants tariffs to raise large amounts of revenue, act as negotiating tools, and reindustrialise the US at the same time.

“It can’t be all three of those things at once when you think about it,” he says.

“If it’s just a negotiating tool, it’s not a regular source of revenue.”

Sir Niall Ferguson says it’s unrealistic to expect the tariffs will achieve Mr Trump’s varying economic objectives. (Four Corners: Ryan Sheridan)

Manufacturing a different outcome

Dan DiMicco is one of the true believers when it comes to Mr Trump’s tariffs.

The former CEO and chair of Nucor, the US’s largest steel manufacturer, was a trade adviser to Donald Trump alongside Mr Navarro in 2016.

“He’s going after the jugular on China, as he should,” he says.

“It’s not the Chinese people, it’s the Communist Party and their leadership that has declared themselves as our existential enemy who want dominate the world in every category.”

Mr DiMicco has seen manufacturing decline from about 20 per cent of the US workforce in the late 70s to around 8 per cent today.

“Our working class has been decimated, and they got nothing out of it,” he says.

“We’re going to bring manufacturing back. And this is a message to the entire world. Trump is sending out one message to the entire world, and he’s sending out a huge, huge message to the Chinese Communist Party.”

Dan DiMicco was a trade adviser to Donald Trump in 2016. (Four Corners: Ryan Sheridan)

When challenged on whether anyone would invest in manufacturing in the US with uncertainty around tariffs, Mr DiMicco was adamant the jobs were already coming back.

“As you and I speak, there’s deals being cut to build manufacturing plants in every critical industry that we’ve lost in this country today. And many of them are already breaking ground,” he says.

But economic modelling done by Professor McKibbin for the Peterson Institute of International Economics in Washington DC on the impacts of Mr Trump’s proposed tariffs suggests the policy will generate more losers than winners.

“The president is very happy to pronounce which firms are coming. The answer will be how many firms exit relative to those that are coming in,” Professor McKibbin says.

“The actual overall impact on the economy is going to be a loss of capital, and therefore a loss of jobs.”

Professor Warwick McKibbin’s modelling shows the tariffs will damage the US economy. (Four Corners: Ryan Sheridan)

Professor McKibbin — who has made accurate predictions around the outcomes of the Global Financial Crisis and COVID pandemic — says Mr Trump’s tariffs will harm those he says he is seeking to protect.

“The two sectors that get hit the most are agriculture and durable manufacturing, which is the Trump heartland,” he says.

“Agricultural employment will be down roughly between 4 and 8 per cent, manufacturing employment will be down between 5 and 10 per by the middle of next year.

“You’ll get lower wages, you’ll get higher prices, and you’ll get no solution to the problems that these people face.”

Temporarily waving the trade war white flag

By mid-May, the Trump administration announced a 90-day pause on the virtual trade embargo between the world’s two largest economies.

The US temporarily lowered tariffs on China to 30 per cent, while China reduced its tariffs on the US to 10 per cent.

But the chaos was far from over.

“This is not the end of a [trade] war,” Professor Krugman says.

“We have tariff rates in place right now that will probably destroy about two-thirds of the trade we previously had with China. That doesn’t sound to me like trade peace.”

On the day of the announcement, Professor Medeiros told Four Corners that the president had made a big mistake in his trade war with China.

“Rule number one for dealing with China is accumulate as much leverage as possible, and as far as I can tell, Donald Trump started a trade war with China without having accumulated any,” he says.

“Now we’ve negotiated a 90-day ceasefire, and not only have we not accumulated any leverage, but we’ve just signalled that we lack resolve.

” This is a very dangerous point for the United States. ”

Evan Medeiros is concerned about how the tariffs will impact the US’s relationship with China in the long-term. (Four Corners: Ryan Sheridan)

While the tariffs may have been reduced, another key pressure point on the US economy had yet to be resolved.

China has a near monopoly on the processing and supply of rare earth minerals — elements that are critical for making cars, missiles, satellites, fighter jets, lasers, tanks and other key products.

It had turned up the heat on the US economy by introducing export controls on these critical elements, restricting their supply to the US.

Professor Medeiros says China has been preparing for this trade war since the first Trump administration, with export controls and antitrust investigations some of the weapons the country has at its disposal.

“China has created a series of what I like to call precision-guided economic munitions,” he says.

” It’s about going after American companies that produce in China and sell in China. It’s about cutting off American access to critical commodities. ”

In response, the US had cut the sales of key technologies to China relating to aircraft and semiconductors.

Export restrictions on both sides of the ledger were at the centre of talks between the US and China in London in mid-June.

On Friday, China confirmed it had agreed to a framework with the US to negotiate the lifting of export controls on both sides.

There are now fewer Chinese imports arriving at ports in the US. (Reuters: Carlos Barria)

The serious risks of future escalations

The trade war launched by Mr Trump could have ramifications for global security, strategic alliances and the economic world order for decades to come.

“I don’t think the trade war is going to end,” Sir Niall says.

” The issue is, does the trade war escalate into something bigger and more dangerous? How much damage does it do to all the economies concerned? ”

Professor Medeiros sees the trade war as part of a bigger picture, a reordering of global power that will likely lead to greater instability.

“The trade war does capture the distrust, the animosity, the competition, which feeds into other areas of US-China security competition in the South China Sea, in the Pacific, very close to Australia, and then of course in the Taiwan Strait,” he says.

The trade war between the US and China could have significant ramifications. (Reuters: Tingshu Wang)

Sir Niall says in a worst-case scenario, Taiwan could be drawn into the dispute between China and the US if the trade war escalates.

“It’s conceivable that so much pressure is being exerted on the Chinese economy, which after all relies very heavily on exports, that Xi Jinping decides, ‘You know what? Let’s also bring national security into this debate and make a move on Taiwan,'” he says.

“I’m not talking about an invasion or a blockade, but it’s perfectly plausible that at some point he says, ‘You know what? Talking of trade, we’re going to start collecting customs on goods going into Taiwan,’ which after all the Chinese consider a province of China.

“That will be the moment that we leave the domain of trade and enter the domain of geopolitics.

” We leave behind trade war, and we run the risk of real war. ”

Watch Four Corners’ full investigation, Trading in Chaos, on ABC iview.