The scope of negotiations
President Trump has been pretty upfront about his plans to revisit trade agreements with dozens of countries—he insists that any new deal has to pay off for Americans. He argues that other nations have been taking advantage of the US with unfair trade practices. Among the contenders for new agreements are India, Japan, and South Korea (these are the countries most likely to seal a deal with the US).
Even though there’s hope around these talks—like a boost of confidence in US financial markets—there are also signs that this trade battle is weighing on the economy. For instance, a recent quarterly GDP report (the first drop since early 2022) pointed to a downturn partly because companies started hoarding goods to brace for tariffs.
The China conundrum
One of the trickiest parts of Trump’s trade playbook involves China. Tariffs on Chinese imports are sitting at about 145%, while China has hit back by slapping a 125% tariff on US goods. As a result, business between the two giants has almost ground to a halt (and this messes with supply chains and overall economic activity in a big way).
Some reports show a steep drop in cargo shipments from China to the US—a 60% decline according to Flexport, and JPMorgan even pegged an 80% drop in Chinese imports by the second half of the year. Treasury Secretary Scott Bessent (a top US official) has called these high tariffs unsustainable (meaning they can’t last forever) and predicts it might take two to three years for things to smooth out between the US and China.
There’s still a chance for US-China discussions though. Beijing is looking over an offer from the US to start talks, even if official sources say no active discussions have kicked off yet. The Chinese commerce ministry has stressed that Washington needs to show some “sincerity” (basically, come to the table in good faith) and steer clear of “coercion and extortion.”
Navigating deadlines and tariffs
Trump has laid out clear timelines to hammer out trade deals, with tariffs being put on hold starting April 9 for 90 days. As the pause is set to end on July 8, there’s a lot of talk about whether heavy tariffs—possibly hitting up to 50%—will be thrown back at several nations.
Trade policy analyst Jacob Jensen points out that locking down a bunch of deals in such a short timeframe is no small feat. He mentions that while it’s easy to exchange words and reach verbal agreements, getting everything in writing is a whole other ball game (and these documents tend to stick around for a long time).
Existing agreements under strain
The plot gets even more tangled with current trade deals like the United States-Mexico-Canada Agreement (USMCA). Even though Trump had a hand in crafting this deal, he later ruffled feathers by slapping a 25% tariff on some goods from Mexico and Canada (this move upset longtime allies).
Meanwhile, changes in US policy have also hit Chinese exporters. An executive order ended the “de minimis” tariff loophole, which means now low-value goods imported into the US owe customs fees.
Market reactions have been all over the map as this tangled web of negotiations and tariffs unfolds. Some bright spots—like the possibility of talks with China and positive US jobs numbers—have provided a bit of comfort to markets on both sides of the Atlantic.
As Trump presses on with his efforts to reshape international trade ties, these ongoing talks will continue to steer economic trends around the globe for years to come. What happens next will not only affect American businesses but will also mold geopolitical alliances across the world (so keep an eye on these developments as they roll out).
