Topic: US News
by StreetNeoG
Posted 1 day ago
With only 70 days until the re-implementation of higher tariffs on 75 trading partners, the Trump administration is facing immense pressure to finalize trade agreements. Yet, with the current 10% blanket tariffs already violating several previously signed agreements, the outlook for meaningful negotiations appears grim.
Reputed international trade experts convey the daunting task ahead. As Harvard Business School's Willy C. Shih succinctly noted, "There's no way" that comprehensive trade deals could be finalized in such a short timespan. Each trading partner of the U.S. has unique dynamics, and broad tariffs do not adequately capture the nuances that define these interdependencies. The time it will take to comprehend the "unexpected impacts" of these tariffs cannot be overstated.
According to Scott Lincicome from the Cato Institute, history shows that the quickest U.S. trade agreement took nearly six months to negotiate. Hence, it seems the administration is increasingly aware of this reality, as evidenced by a shift in rhetoric towards "frameworks" rather than concrete finished deals.
The U.S. Trade Representative (USTR) is now pivoting towards establishing a well-defined negotiation framework. A spokesperson highlighted that they are moving swiftly with "willing trading partners" while clarifying U.S. objectives. Nonetheless, the concrete outcomes of these engagements remain elusive.
| Date | Event | Status |
|---|---|---|
| April 12 | Howard Lutnick claims Trump is "in the driver's seat". | Ongoing discussions with 75+ countries |
| April 13 | Peter Navarro asserts 90 deals are pending. | Pending |
| April 18 | Japan's trade negotiator departs without a deal. | Unresolved |
| April 23 | Thai finance minister meeting postponed. | Rescheduled |
Lincicome emphasizes that successful trade deals require extensive negotiation, addressing a plethora of topics from labor and environmental regulations to dispute resolution mechanisms. Each of these agreements typically encompasses over 20 chapters, indicating a complexity that cannot be resolved swiftly.
The implications of tariffs on U.S. consumers and businesses further muddy the waters. While Lincicome believes the tariffs may not devastate most Americans, their annoyance could manifest at the ballot box, creating a dual pressure point for Trump. The market dynamics of negotiation inherently give foreign governments leverage; they are aware that U.S. concessions may be necessary.
Philip Luck from the Center for Strategic and International Studies cautionarily points to the likelihood of limited "vague agreements" lacking substantive content. Yet, such agreements could require significant concessions from trading partners, who, resentful of the existing tariffs, may be less willing to cooperate. "We've really shot ourselves in the foot here," argues Luck, expressing the conventional wisdom that trade deals generally should not commence with tariffs.