Trade news doesn’t seem to take a vacation, even when the rest of us do. If you feel confused about the state of play with President Donald Trump’s tariffs, you’re not alone. It’s hard to keep up with this administration’s dizzying decision-making process.
At the start of this week, Trump once again delayed the implementation of his so-called reciprocal tariffs, pushing the deadline to August 1. He sent letters to more than a dozen countries, including Japan, South Korea, South Africa, Cambodia, Thailand, and the Philippines, informing them of the tariff rates facing their exports unless they reach deals before then. He announced 50 percent tariffs on Brazil, tied to the “witch hunt” he asserts is being levied against former President Jair Bolsonaro. Letters to more countries and trading blocs are expected in the coming days, though Trump told NBC that he plans to impose blanket tariffs on most trading partners as high as 20 percent. Those rates could be even higher if countries retaliate or transship their goods. He also threatened additional tariffs on imported copper, pharmaceuticals, and semiconductors.
I was skeptical of the White House's declaration earlier this year that he would reach ninety deals in ninety days—the timeline of his initial implementation pause. Negotiating traditional trade agreements takes time as countries work through a complex array of tariff and non-tariff barriers. Even simpler tariff-only agreements usually require dialogue about what’s included, what’s outside the agreement, and the rules of origin to apply to particular products.
The Trump administration seems to have realized this and come up with a novel approach. The couple of deals they have announced have tended to be frameworks or outlines of an agreement, with a lot of details to be worked out down the road. And, having grown frustrated with the pace of negotiations, Trump announced that he would simply be sending letters to countries letting them know the outcome. Much less of a negotiation than a fait accompli. As Trump put it, “The deals are mostly my deal to them.”
So, how much has the administration achieved in the initial 90-day pause since Liberation Day? Ten of CFR’s leading trade and economic experts—Inu Manak, Rebecca Patterson, Zoe Liu, Shannon O’Neil, Brad Setser, Ted Alden, Benn Steil, Jon Hillman, Matt Goodman, and Will Freeman—shared their assessment of trade deal progress, market effects, and implications for the administration’s stated objectives as part of a feature piece for CFR.org.
I encourage you to read the full article, but I’ve shared a few teasers below.
Inu Manak, fellow for trade policy, analyzed whether Trump’s tariff pause delivered trade deals.
These don’t really sound like true trade negotiations, where countries exchange reciprocal offers and concessions. Instead, it points to why the administration has struggled to close a greater number of deals—both sides have a very different understanding of the end goal. U.S. trading partners want to bring their economic relationship back to more stable ground, whereas the Trump administration wants to maintain persistent uncertainty to extract even more concessions over the next few years. The constantly changing tariffs and shifting deadlines may get countries to the table, but very few will tackle comprehensive trade issues if the Trump administration cannot guarantee that the trade chaos will come to an end.
Rebecca Patterson, senior fellow, reflected on financial market lessons from the last 90 days.
Stepping back from the daily trade news tsunami, I think there are at least four lessons we can take from this 90-day period.
First, U.S. financial market exceptionalism should not be taken for granted. The brief spurt of U.S. asset selling in April, and continued dollar weakness, shows that American markets can be heavily influenced by policy decisions and foreign investor reactions. Foreign demand is not a given. Second, we need to remember that shifts in U.S. asset holdings can come in different shapes and over different time frames. Foreign investors can trim U.S. asset exposures, but they can also hold onto those assets and simply hedge out the currency risk—resulting in a weaker dollar. Third, alternatives to U.S. assets need to be considered as dynamic, relative opportunities. Even if the U.S. economy grows faster and is larger, other countries with improving growth dynamics and much less demanding valuations can pull capital away from the U.S. Germany has been a great example of this in 2025. Finally, the ongoing trade negotiations illustrate the many links between financial markets, economic trends, and policy decisions. You need to look at the whole rather than any one piece. For instance, despite external factors such as the Middle East conflict that typically would pull bond yields lower as investors seek liquidity and safety, the hold placed on U.S. monetary policy—largely in response to tariff uncertainty—has provided a measure of support for longer-term Treasury yields. The higher deficits resulting from the reconciliation package, along with the Fed’s stance, support yields which in turn weigh on household and corporate borrowing, slowing growth at the margin.
Shannon O’Neil, senior vice president, director of studies, and Maurice R. Greenberg chair, evaluated whether Trump will bring manufacturing back to the United States.
Blanket tariffs may inadvertently slow reshoring and job creation in the United States. To set up new factories and facilities, companies need steel, aluminum, machinery, and other components, many of which today come from abroad. Economy-wide tariffs layer additional costs to the uncertainty of moving operations. In the longer term, increasing American manufacturing jobs will likely depend on how connected to and competitive U.S.-made products are in global markets. If tariffs price American-made goods out of international markets, manufacturing jobs could shrink instead of grow over time.
Zongyuan Zoe Liu, Maurice R. Greenberg senior fellow for China Studies, examined how China is surging ahead.
From Beijing’s view, Washington’s efforts to stifle China’s rise only deepen the resolve to decouple. China doesn’t want a trade war, but it’s ready for one. Leaders and entrepreneurs in China are doubling down on self-reliance, even if the U.S. market remains hard to replace. Yes, tariffs sting. China has weathered worse. In the 1990s, it absorbed forty million layoffs during state-owned enterprise reforms. Today’s factories are more automated. The Party isn’t panicking.
Brad Setser, Whitney Shepardson senior fellow, assessed whether tariffs will reduce the U.S. trade deficit.
It may come as a surprise that tariffs have almost no effect on the trade deficit, according to economic theory. Moreover, a quick survey of large economies shows that there is also no real correlation between the level of tariffs and the trade balance. The US has had—until recently—low tariffs and a trade deficit. The EU has low tariffs and a trade surplus. India has high tariffs and a trade deficit. China has high tariffs and a trade surplus. What appears to matter far more is a country’s savings rate, level of consumption, fiscal stance, and the strength of its currency. Simply put, a fiscal deficit that is credibly forecast to be over 6 percent of GDP and could approach 7 percent of GDP is inconsistent with a large fall in the trade deficit.
Edward Alden, senior fellow, analyzed whether tariffs have curbed trade barriers and unfair practices.
The United States has long perceived itself as a relatively open economy in which its exporters are victimized by foreign trade barriers. Through a variety of tools—international and regional negotiations, bilateral talks, tariff threats, and even new tariffs—presidents have long tried to reduce or eliminate these barriers to U.S. global commerce. Trump has now governed for four and a half years, and his record shows little success in reducing foreign trade barriers. Can Trump’s more aggressive tariff threats in the second term yield better results? So far, there is little reason to think so. [T]ariffs [are likely to] remain much higher on products moving both ways across the border.
Benn Steil, senior fellow and director of international economics, pointed to the rise in national security tariff justifications.
President Trump’s “Liberation Day” tariffs… represented a mere acceleration of a long-established trend: presidents using “emergencies” and “national security” as pretexts for arrogating unlimited tariffing and other economic powers from Congress.
The president imposed these massive tariffs under executive authority conferred by the 1977 International Emergency Economic Powers Act (IEEPA), [claiming] that long-standing U.S. trade deficits constituted an “emergency.” Now that the Court of International Trade has rejected the president’s claimed tariffing authority under IEEPA, however, he may, depending on the course of the appeals process, be obliged to seek alternative authority to reimpose them. Fortunately for him, that authority exists—though in a mildly diluted form, requiring consultation and transparency—in the form of Section 232 of the (inaptly named) Trade Expansion Act of 1962. Section 232 tariffs are justified by impairments to U.S. “national security”—which sounds a lot like an “emergency.”
Jonathan Hillman, senior fellow for geoeconomics, noted the growing national security costs of the administration’s tariffs.
President Trump has been wielding tariffs to confront a range of national security threats, [b]ut the national security costs of these tariffs are mounting, especially for the U.S. defense industry, critical infrastructure, and the country’s relationships with its partners and allies. Tariffs make it more difficult to meet U.S. defense requirements in many of the same ways that they affect American households. Higher costs are passed to the customer, which in this case is the U.S. government. As a result, the Department of Defense simply can’t buy as much with its budget. Tariffs also threaten U.S. critical infrastructure by driving up the cost of components. Most power generation technologies are expected to face cost increases of 6–11 percent, according to environment and energy consultancy Wood Mackenzie. Finally, tariffs are also taking a toll on U.S. relations with partners and allies. Public majorities in twelve allied countries with U.S. treaties believe Trump’s economic policies will have a negative effect on their country’s relationship with the United States, according to a recent Ipsos poll. This shift in public sentiment encourages elected leaders to “derisk” from the United States.
Matthew Goodman, distinguished fellow and director of the Greenberg Center for Geoeconomic Studies, argued that any revenue surge from the tariffs is likely to be temporary.
As of July 1, roughly $97.3 billion in tariff revenues had come into the Treasury, up some 110 percent from the same period of 2024. In June alone, tariff revenues were $28 billion, a new record and more than four times the amount collected in the same month last year.
However, there are several reasons to believe that this spurt in revenues will eventually peter out. Imports into the United States in the first few months of 2025 have surged as businesses seek to lock in supplies and prices ahead of tariff increases; eventually, these businesses will reduce their purchases as the tariffs kick in and prices rise. One stated goal of the tariffs is to encourage U.S. and foreign companies to produce more goods in the United States. If this works and imports fall as a result, tariff revenues will also decline. And if the Trump administration succeeds in striking deals with trading partners under which both sides agree to reduce tariffs, again, revenue to the U.S. Treasury will fall. Finally, however much revenue is ultimately generated by the tariffs, it is worth remembering where those revenues will ultimately come from: the pocketbooks of American consumers. Businesses that initially cover the costs of tariffs will almost certainly pass them on to their customers.
Will Freeman, fellow for Latin America studies, analyzed the costs of Trump’s Panama Canal strategy.
President Trump made Panama an early priority of his second administration, publicly mentioning the country and its canal fifteen times between December and May. He floated retaking direct control of the canal—which still handles 40 percent of all U.S. container traffic annually—while also demanding that Panamanian President José Raúl Mulino distance the country from China, which gained a foothold in port and telecommunications infrastructure after Panama City established diplomatic relations with Beijing in 2017. If the plan was to reduce Chinese presence in a country critical to U.S. trade, Trump’s strategy largely worked—with help from the Biden administration, which had more quietly pursued the same goal.
The question is whether Trump’s tough approach came at an acceptable cost. Mulino is now weak and unpopular—partly because he is seen as having done too little to stand up to Trump and defend Panamanian sovereignty. Months-long protests against his government have paralyzed parts of the country. Panama is sliding into the type of ungovernability that—even more than Chinese influence—threatens the future of the canal and thus U.S. trade.
We welcome your feedback on this column. Let me know what foreign policy issues you’d like me to address next by replying to president@cfr.org.
