Bram Berkowitz, The Motley Fool
5 min read
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President Donald Trump's 90-day pause on higher tariff rates is set to end in the coming weeks.
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Some trade deals have been struck, but investors are trying to figure out what's next.
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Nothing is off the table, including more trade deals, another pause on tariffs, or potentially even higher tariff rates going into effect.
April seems like it happened a lifetime ago. On April 2, dubbed by President Donald Trump as "Liberation Day," the White House imposed sweeping tariff rates on the United States' largest trading partners.
The high rates caught many investors off guard, and the stock market plummeted. By April 9, Trump announced a 90-day pause on the high tariff rates to give countries time to negotiate trade deals, leading to a major market rally. That 90-day pause will end on July 9. Should investors buy stocks before then?
Since the pause, the Trump administration has made some progress on forging trade deals, but ultimately, there is still much to be decided.
Currently, there are 50% tariffs in place on steel and aluminum imports, although the rate falls to 25% for any of these materials coming from the United Kingdom. There are also 25% tariffs in place on certain car parts. Furthermore, the 10% base level of tariffs on imports from most other countries remains.
The U.S. has already struck a trade agreement with the U.K., leaving the 10% tariff rate intact. The White House also appears to have struck a trade deal with China, which has been the biggest question mark in all of this. The deal appears to set a total tariff rate of 55% on Chinese goods, although that includes the 25% tariffs Trump imposed on Chinese goods in his first term, meaning the new 30% rate is expected to be left in place.
As of June 25, there have been many reports of the U.S. closing in on agreements with countries like Vietnam and India, while trade deals have not been reached with major trade partners like the European Union, Japan, and Canada, as of this writing.
I'm expecting more trade deals will be struck by July 9. It's also possible there is another pause, which Treasury Secretary Scott Bessent recently hinted at for countries that show "good faith."
However, I also wouldn't rule out Trump letting some higher tariff rates go into effect for imports from countries that the administration does not believe negotiated in good faith. The stock and bond markets are always good barometers for how much room Trump has to maneuver when it comes to tariffs.
