Racing for Trade Deals

Today, President Trump ended a rule that let cheap Chinese goods bypass U.S. tariffs. The move closes a loophole, the “de minimis” exemption, that many U.S. businesses say gave China an unfair advantage. But it will also raise prices for American consumers on platforms like Amazon, Shein and Temu that took advantage of that provision. Now products on those apps face the same tariffs as other Chinese goods, a minimum of 145 percent.

Trump says he is giving other countries a chance to avoid steep levies by making trade deals. His administration is negotiating with more than a dozen other nations before a self-imposed deadline of July 8. The president styles himself as a consummate dealmaker, but this will test even his abilities. U.S. trade negotiators, already short-handed, are negotiating simultaneously with India, South Korea, Japan, Vietnam and others.

Today’s newsletter is about how these talks might go.

A long game

Trump imposed, quickly withdrew and then threatened to bring back huge tariffs on dozens of countries. Immediately, they began calling and asking what they could do to stop him. “More than 100 countries have already come to the table looking to offer more favorable terms for America and our people,” Karoline Leavitt, the White House press secretary, said at a briefing with Treasury Secretary Scott Bessent on Tuesday. “There has never been a president who has created his own leverage like this president.”

What can Trump get? For starters, some countries are offering to lower their own tariffs on American exports and cut red tape that keeps U.S. businesses out. India said it might lower its tariffs on U.S. farm goods, while Europeans may drop them on cars and machinery if Washington agrees to do the same.

But finalizing granular deals with all these countries is unlikely, given that traditional agreements typically take more than a year to negotiate. Torsten Slok, the chief economist at Apollo Global Management, an investment firm, has calculated that, on average, trade deals signed by the United States take 18 months to negotiate and 45 months to implement. Government officials are chatting each day with a dizzying carousel of foreign governments, in person and in video calls, to solve trade spats that have persisted for decades.

Longstanding trade fights between countries exist for many reasons: Europeans don’t want to import any U.S. meat treated with chlorine or hormones that they ban, for example. Which is why, instead of finalizing new agreements by July 8, the White House may be able to offer only a plan for future negotiations.