US warns of return to steep tariffs if no trade deal by August 1
The United States has warned that tariffs will return to the elevated levels imposed in April if no trade agreements are reached by August 1, according to a report by Krungthep Turakij.
Citing CNN, Treasury Secretary Scott Bessent stated that tariff notification letters will be sent to around 100 countries in the coming days, as the Trump administration's 90-day tariff reprieve is due to expire on Wednesday (July 9).
“If you take no action by August 1, you’ll go back to the high tariffs from April 2,” Bessent said on CNN’s State of the Union programme on Sunday (July 6), referring to the status of trade negotiations.
President Donald Trump had indicated that these letters would outline tariffs starting at the current base rate of 10% and potentially going as high as 70%. However, Bessent clarified on Sunday that the US would not impose 70% tariffs on major trading partners.
“We’ll be sending out trade deal letters on Monday — maybe 12 or 15 — and we’ve already struck some agreements,” Trump told CNN’s Betsy Klein at Morristown Municipal Airport in New Jersey on Sunday afternoon.
He added that letters would continue to be sent on Tuesday and Wednesday. “We’ll have deals with most countries by July 9, either by sending the letter or completing the agreement,” Trump said.
Commerce Secretary Howard Lutnick, speaking alongside Trump on Sunday, confirmed that discussions were ongoing and that the new tariff regime would take effect on August 1.
Bessent declined to name any countries close to finalising deals when pressed by CNN on Sunday, but said that around 100 letters would be sent to smaller nations with whom the US does not trade heavily, many of which are already subject to the 10% base tariff.
On April 9, Trump announced a three-month suspension of all “reciprocal” tariffs, despite having previously insisted that historically high tariffs would remain. Later that month, he claimed in a Time magazine interview to have secured 200 trade agreements, though he declined to name the counterparties.
To date, Trump has only officially confirmed deals with three countries: the United Kingdom, which maintains a 10% tariff rate; China, which temporarily cut tariffs on most goods from as high as 145% to 30%; and Vietnam, with a minimum tariff of 20%.
Bessent said that following these framework agreements, upcoming letters would specify tariff rates and that 100 deals could be concluded in the coming days.
“Many of these countries have never approached us,” he added, noting, “We have leverage in this situation” because many of them are facing trade deficits.
He rejected the suggestion that the August 1 date was a new deadline, instead calling the policy one of “maximum pressure”.
“It’s not a new deadline. We’re saying, ‘this is when it happens. If you want to rush things, fine. If you want to revert to the old rate, that’s your choice,’” Bessent said, using the EU as an example of countries that entered negotiations after Trump threatened a 50% tariff on EU imports.
Economists have warned that Trump’s trade war, particularly the sweeping tariffs on Chinese goods, would raise costs for consumers. Companies such as Walmart have said they would need to raise prices, despite Trump’s denials.
“We haven’t seen any inflation,” Bessent told Fox News Sunday, dismissing such forecasts as “misinformation” and a “tariff delusion”. He and other Trump officials have repeatedly claimed that countries like China are bearing the cost of tariffs.
US wholesale inflation edged up in May, partly due to higher-priced goods, though the impact of tariffs was limited. The Producer Price Index — a key measure of wholesale inflation — rose by 0.1% in May, lifting the annual rate to 2.6%, according to June data from the Bureau of Labour Statistics.
Former Treasury Secretary Larry Summers, who criticised Bessent for downplaying the economic impact of tariffs, said on ABC’s This Week that while tariffs might generate some revenue, they would do so at the cost of higher inflation and reduced competitiveness for US manufacturers.
Stephen Miran, chair of the White House Council of Economic Advisers, appearing on the same programme, countered that there was no “sustained evidence” the tariffs imposed on China during Trump’s first term had harmed the economy. He said the administration was performing “just as well” this year.
“Tariff revenues are flowing in steadily, there’s no significant sign of inflationary pressure, and job growth remains strong,” Miran said.
