Countries Worldwide Rush to Finalise Trade Agreements with US Ahead of Trump's Tariff Deadline

With President Trump's tariff deadline approaching, countries are urgently negotiating trade agreements with the US to mitigate potential tax increases on goods. The focus is on securing favourable terms during this critical period.

Countries worldwide are hastily preparing for President Donald Trump's imminent tariff increases. As the Friday deadline approaches, Trump announced a 90-day negotiation period with Mexico, maintaining the current 25% tariff rate instead of the previously threatened 30%. Mexican leader Claudia Sheinbaum expressed relief on X, noting the opportunity to negotiate a long-term agreement through dialogue.

White House press secretary Karoline Leavitt stated that Trump would sign an order to implement new tariffs starting at 12:01 a.m. EDT on Friday. Countries without prior communication from Trump will be informed of their potential tariff rates through letters or executive orders. This uncertainty has characterized Trump's tariff strategy, with economists suggesting that US consumers and businesses will bear some costs.

Trade Negotiations and Agreements

Trump's previous "Liberation Day" tariffs in April caused stock market turmoil, leading to recession fears. In response, he initiated a 90-day negotiation period. Despite extending the timeline, he struggled to secure sufficient trade deals, prompting him to send rate lists to world leaders. Recent agreements include deals with South Korea, the European Union, Japan, Indonesia, and the Philippines.

Commerce Secretary Howard Lutnick mentioned on Fox News' "Hannity" that Cambodia and Thailand reached agreements after resolving their border conflict. However, countries like Switzerland and Norway remain uncertain about their trade status. Norwegian Finance Minister Jens Stoltenberg expressed doubt about reaching a deal before Trump's deadline.

EU and Mexico Trade Frameworks

The European Union is awaiting a crucial document detailing how tariffs on imported autos and other goods will function within the 27-member bloc. EU Commission spokesperson Olof Gill emphasized that the US must implement its commitments. The document will not be legally binding.

As part of the agreement with Mexico, goods entering the US will continue facing a 25% tariff linked to fentanyl trafficking. Autos will also face a 25% tariff, while copper, aluminium, and steel will be taxed at 50% during negotiations. Mexico agreed to eliminate "Non Tariff Trade Barriers," though specifics were not provided.

US-Mexico Trade Dynamics

The 2020 U.S.-Mexico-Canada Agreement (USMCA) protects some goods from tariffs but is up for renegotiation next year. Trump initially imposed tariffs on Mexican and Canadian goods earlier this year. The US Census Bureau reported a $171.5 billion trade deficit with Mexico last year, up from $63.3 billion in 2016 before Trump's presidency.

Trump aims to address fentanyl trafficking and reduce the trade gap with Mexico. Despite previous negotiations under USMCA, Trump seems dissatisfied with the deal's outcomes as he seeks further changes.

Trump's approach has created uncertainty among trading partners despite public announcements of deals. The EU awaits clarity on its framework for taxing imports from its member states. Meanwhile, Trump's focus remains on negotiating favourable terms for the US while addressing trade imbalances.

With inputs from PTI