US President Donald Trump has once again thrown global trade into uncertainty by delaying a major round of tariff hikes, offering a temporary reprieve to US trading partners but deepening concerns over the lack of stability in international markets.
The move, announced via executive order on Monday (7), shifts the deadline for new tariffs from July 9 to August 1, 2025, giving countries an extra three weeks to negotiate deals with the US.
Tariff Hikes Delayed, But Uncertainty Persists
The tariffs, originally set to take effect this week, target imports from 14 countries, including major US allies such as Japan and South Korea. Trump’s plan includes a 25% tariff on goods from these nations, with even steeper rates—up to 40 per cent—for countries like Myanmar and Laos.
The White House has sent formal letters to the affected countries, reiterating that tariffs will begin August 1 unless satisfactory trade agreements are reached. Trump emphasized that this new deadline is “firm, but not 100 percent firm,” suggesting some flexibility for nations willing to negotiate.
Global and Market Reactions
The United Nations has warned that the extension, while providing short-term relief, only prolongs the uncertainty that has plagued global trade since Trump revived his aggressive tariff agenda earlier this year. Pamela Coke-Hamilton, director of the UN-backed International Trade Centre, said, “This move actually extends the period of uncertainty,” noting that businesses and investors require stability to make long-term decisions.
Financial markets reacted swiftly. The S&P 500 index fell by about 1 per cent, its sharpest drop in three weeks, while the US dollar strengthened and gold prices slipped as investors weighed the prospects of a prolonged trade dispute.
Major exporters to the US, such as Japan and South Korea, saw their currencies weaken, and emerging markets were rattled by the threat of further tariffs, particularly those aligned with the BRICS bloc.
International Negotiations Intensify
Countries are scrambling to avoid the looming tariffs. Japan and the US have agreed to “continue talks vigorously,” with Japanese officials expressing hope for a mutually beneficial agreement before the deadline. Other nations, like Cambodia, have celebrated partial victories after negotiating reductions in threatened tariffs, but the overall environment remains tense and unpredictable.
US Treasury Secretary Scott Bessent confirmed that unless deals are finalized by August 1, the higher tariff rates announced in April will be enforced, warning, “If you don’t move things along, you will boomerang back to your April 2 tariff level”. Only the United Kingdom and Vietnam have so far managed to secure agreements to avoid the new levies.
Broader Impact and Outlook
Trump’s stated goal is to protect American industries and jobs from foreign competition, but economists warn that the tariffs could drive up prices for US consumers and disrupt global supply chains. The continued uncertainty is already affecting investment decisions and causing volatility in both developed and emerging markets.
As the new August 1 deadline approaches, the world’s largest economies remain on edge, with the possibility of further negotiations—and further delays—still on the table. For now, Trump’s tariff strategy has bought time, but at the cost of prolonged instability in the global trading system
