The hopes of any extension of the July 9 tariff deadline by the Donald Trump-led US administration seems fading as the US President has revealed his plans to notify various nations with new tariffs on their imports to the United States.
The development came amid much suspense over Donald Trump’s next steps as the July 9 deadline comes close and trade negotiations are still in process with various nations.
“We’re probably going to be sending some letters out, starting probably tomorrow, maybe 10 a day to various countries saying what they’re going to pay to do business with the US,” Donald Trump told reporters on Thursday.
Donald Trump has repeatedly warned that if countries fail to seal deals with the US by July 9, he will move forward with tariffs.
This has added to the already high pressure on trading partners who are scrambling to finalize agreements with his administration.
The US administration has completed its agreements with the UK and Vietnam and a temporary deal with China prompting the two largest economies of the world to reduce their retaliatory tariffs.
When questioned as to whether more would be made, Trump responded, “We have a few more in the works, but to be honest I am looking more at sending out letters detailing the amount of tariffs these countries will be met with.”
Donald Trump and his tariff threats
Donald Trump, who returned to the White House on the backs of the “Make America Great Again” (MAGA) frenzy has openly called out countries on their high tariffs against the United States.
In April, Donald Trump announced duties set to range from 10% up to as high as 70% for certain countries that fail to reach trade deals with the United States by a July 9 deadline.
Earlier this week, the Donald Trump-led administration signed a trade deal with Vietnam and finalized a 20% tariff on Vietnamese exports to the US and a 40% tariff on goods suspected of being transshipped through the country.
Moreover, a trade pact with India is expected to be inked soon as negotiators from both nations are engaged in closed-door meetings.
Economic impact
It is expected that Trump’s new tariff rates of up to 70% will create a major negative effect on the economy of the US.
As per Penn Wharton Budget Model, such tariffs would cut long-run growth in GDP by approximately 6% and wages by 5%, with an average middle-income household losing about $22,000 in their lifetime.
The consumer price will increase due to the tariffs since firms will transfer about 70% of the direct cost to the consumer.
An increase in the federal revenue can be experienced, but that will be balanced by a decrease in household income, consumption, and economic growth due to it.
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