Trade Deals Need More Than Ninety Days

This piece is part of a joint analysis assessing the Trump administration’s performance during the first ninety days of “liberation.”

When President Donald Trump paused his sky-high “reciprocal” tariffs just a few days after introducing them on April 2 (what he called Liberation Day), he urged countries to negotiate deals with the United States within ninety days to avoid their reimplementation. Although the costs of those tariffs and the market uncertainty they generated are largely understood as the reason Trump reversed course, White House advisor Peter Navarro argued that the pause was intentional and strategic, stating that “we’ve got 90 deals in 90 days possibly pending here” because of that high-pressure strategy. Director of the National Economic Council Kevin Hassett said in early April that more than fifty countries had reached out to begin negotiations. As the ninety-day clock continued to tick down, the U.S. trade representative made a last-ditch effort to close out deals in early June, asking countries to submit their best offers. So far, only two deals have materialized: a signed agreement with the United Kingdom and a preliminary agreement with Vietnam.

This is not surprising. Trade negotiations are not rapid-fire business deals. They involve serious and complex diplomacy that engages a broad range of stakeholders, government agencies, and lawmakers. Typically, trade negotiations take an average of 917 days to conclude—roughly 2.5 years. The Trump deals are taking a different path, as they are anything but typical.

The agreement reached with the United Kingdom reveals the contours of what additional deals could look like. At just five pages, the agreement reads more like a term sheet than a trade agreement. It is best to think of the agreement as a deal that resolves some trade irritants; the bulk of it is a framework for future negotiations on a range of issues, such as market access, digital trade, nontariff barriers, and economic security. The agreement also includes enhanced market access for beef and ethanol and addresses some of the national security–related tariffs that Trump enacted on vehicles with tariff-rate quotas. Future tariffs under Section 232, which allows the president to restrict imports that pose a threat to national security, as well as a host of other issues, are up for negotiation.

Meanwhile, the preliminary agreement with Vietnam is highly asymmetric, and is likely another loose framework for future talks. While the administration has not yet released the text of the deal, they have hinted at some of the contents. For example, Vietnam agreed to reduce tariffs on U.S. imports to zero, a win for agricultural interests, where average tariffs sit at roughly 17 percent. However, unlike the United Kingdom, Vietnam’s exports will face a 20 percent tariff. Furthermore, exports that are transshipped through Vietnam (meaning that they are made elsewhere but simply shipped out of Vietnam to receive better tariff treatment), will face a 40 percent tariff. This provision is aimed squarely at Chinese manufacturing investments in Vietnam. How broadly transshipment will be defined is not entirely clear, nor is whether some amount of Chinese content embedded in a product would trigger a higher tariff rate. This could have significant implications not just for Vietnam, but for other countries with high levels of Chinese investment, such as Indonesia, Malaysia, and Thailand.

Those arrangements tell us several important things about future deals. Most important, market access for U.S. trading partners will probably be worse than where it stood at the beginning of the year. The general baseline for trade with the United States is exceedingly protectionist, with a 10 percent rate sticking. Tariff-rate quotas, which restrict the quantity of a certain import that is eligible for a preferential duty rate, seem to be a tool of choice for the Trump administration. Additional rules that try to limit the amount of Chinese inputs in products shipped to the United States also seem likely.

Yet there are some positive outcomes. For example, the United States could achieve limited market access in some sectors, such as agriculture and energy. Digital trade is back on the agenda, and bilateral discussions could help build support for a bigger deal at the World Trade Organization, which would go further to ensure fair global competition for U.S. businesses.

In this light, the July 9 deadline passing without any major deals is not a bad thing. It will give the Trump administration more time to negotiate larger concessions and consider where some topics can be better addressed among a larger group of trading partners, such as talks on nonmarket practices and digital trade. Treasury Secretary Scott Bessent recently signaled that trade talks would continue past the deadline, and that deals could be inked with “10 or 12 of the important 18” trading partners. The Trump administration could do so by Labor Day and turn to “another important 20 relationships.” The European Union, India, Japan, and South Korea are some of the possible contenders.

Trump floated the idea of simply sending a letter declaring new tariff rates to countries that have not finalized deals as he sees fit. As of 1:00 pm on July 7, Trump posted two letters on Truth Social, to Japan and South Korea, raising their tariffs to 25 percent on August 1, imposing a higher (unspecified) tariff on transshipped goods, and threatening higher tariffs if either country retaliates with tariffs of their own. The United States has a trade agreement with South Korea already, and average tariffs are close to zero, so this action not only violates that existing accord but raises questions about the administration’s objectives for “reciprocal” trade. These letters are sure to agitate Japan and South Korea—two important trading partners and allies—though the threatened tariffs provide a needed offramp for an immediate tariff hike, creating space for wrapping up talks in the coming weeks instead.

Sending similar letters to other countries at this stage could add pressure to ongoing talks, but U.S. trading partners have so far held firm against shifting threats. The see-sawing approach to trade may make for interesting headlines, but it also serves to undermine serious and thoughtful policy discussions that go beyond addressing the newly created problem of the day. Deadlines are meant to be missed, and the administration would be better off taking their time with negotiations and holding off on any announcements save for maintaining the pause on reciprocal tariffs. In order to avoid the additional market instability that would follow another policy reversal, the Trump administration should exercise more patience with U.S. trading partners. Trade deals do not get done in ninety days, and that is okay.