Trump raises the stakes and unleashes trade chaos

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The Big picture | Tariff letters and bilateral negotiations | Copper tariffs | Long-Term impacts

The Big picture 

In a Washington International Trade Association discussion, three former US trade negotiators unpack the past week’s announcements.

Mentioned publications 

1. Former Trade Negotiators Unpack this Week’s Trade & Tariff Announcements – Washington International Trade Association, July 11, 2025
   Washington International Trade Association hosted a webinar to unpack the recent trade and tariff announcements made by the White House. The speakers included Wendy Cutler, Daniel Mullaney, Mark Linscott and Michael J. Smart. 

Tariff letters and bilateral negotiations 

The AP takes a look at the countries that received Trump’s tariff letters. Here are the letters for Japan (including an annotated version from the Wall Street Journal), Korea, Brazil, Canada, the EU, and Mexico. 

Trump has threatened steep duties on goods from the EU and Mexico, reports the New York Times.  CNBC says that Trump’s 50% Brazil tariff stretches emergency powers. Trump is planning to impose a 35% tariff on Canada, writes Retuers.  Japan and Korea are planning a last ditch appeal, per the Wall Street Journal. Vietnam’s leaders were surprised by Trump’s announcement of a deal, per Bloomberg, which also reports that India is still seeking a deal with rates below 20%. And even Myanmar, which is not officially recognized by the US, has offered to send a negotiating team in response to Trump’s letter, according to Nikkei Asia. Hinrich Foundation’s Deborah Elms writes on the continuing uncertainty after the Liberation Day Round 2.

Mentioned publications 

1. A look at the countries that received Trump’s tariff letters – Associated Press News, July 11, 2025 
   President Trump has sent letters to over two dozen countries, warning of higher tariffs starting August 1 unless trade deals are struck. These include major US trading partners like the EU, Canada, Mexico, Japan, South Korea, and Brazil. Most countries already face a 10% baseline tariff since April. New rates range from 20% to 50%, with some reduced from initial levels. Trump warned countries against retaliatory tariffs, threatening even higher rates if they respond in kind. AP presents details of tariff rates imposed on the countries that have received letters so far and their responses to the same.
   Key letters:
   - Japan (Annotated Version of Trump’s Tariff Letter to Japan – The Wall Street Journal, July 7, 2025)
   - Korea 
   - Brazil
   - Canada
   - EU 
   - Mexico 

2. Trump Threatens Steep Tariffs on Goods From E.U. and Mexico – Jeanna Smialek and Ana Swanson, The New York Times, July 12, 2025 
   Trump announced a 30% tariff on imports from the European Union and Mexico, effective August 1, raising tensions with two of the US’s largest trading partners. The announcement disrupted expectations of compromise, especially as the EU was bracing for only 10% tariffs. EU officials stated that the latest tariffs would disrupt trans-Atlantic supply chains and stated that they will take “proportionate countermeasures” if required. Likewise, Mexico responded by rejecting the tariffs as “unjust” and plans to propose alternatives before the deadline. 
3. Trump’s 50% Brazil tariff stretches emergency powers already facing court challenge – Kevin Breuninger, CNBC, July 11, 2025 
   Trump announced a blanket 50% tariff on Brazilian imports effective August 1, citing both trade and political grievances. Trump called Jair Bolsonaro’s trial a “Witch Hunt” and accusing Brazil of attacking US free speech. He framed Brazil’s actions as a US national security threat, marking an unprecedented use of IEEPA. Critics argue that Trump’s claims have no basis as the US enjoyed a $7.4 billion goods trade surplus with Brazil in 2024. 
4. Trump puts 35% tariff on Canada, eyes 15%-20% tariffs for others – Reuters, July 11, 2025 
   Trump announced a 35% tariff on Canadian imports, up from 25%, effective August 1. Goods covered under USMCA, and 10% tariffs on energy and fertilizer, are expected to remain exempt — pending final decision. Trump linked tariffs to issues like fentanyl flows and dairy trade barriers, framing the trade deficit as a national security threat. He suggested tariffs could be revised if Canada cooperates on fentanyl enforcement. Canada pledged to continue trade negotiations and emphasized its progress on fentanyl and border security cooperation.  
5. U.S.’s Biggest Asian Allies Ready Last-Ditch Trade Appeal to Trump – Timothy W. Martin and Jason Douglas, The Wall Street Journal, July 8, 2025 
   Trump gave countries like Japan, South Korea, and others until August 1 to strike new trade deals or face 25–40% tariffs. Japan faces elections on July 20, limiting room for compromise. Likewise, South Korea’s new president, Lee Jae Myung, criticized Trump’s letter as “regrettable.” Autos, rice, soybeans, and steel remain flashpoints in talks with Trump seeking greater market access for US products, which could hurt sensitive sectors in Asian economies. The US is also pressuring Asian nations to limit economic ties with China. 
6. Vietnam Surprised by Trump Tariff Decision, Seeks Lower Rate – Bloomberg, July 11, 2025 
   Trump announced that Vietnam has agreed to a 20% tariff, catching Vietnamese leaders off guard. Bloomberg reports that Vietnam is still seeking to negotiate for a lower 10–15% rate. Despite Trump’s declaration of a deal, no official details have been finalized or released. Despite the uncertainty, foreign investors interpreted the 20% rate as favorable compared to higher tariffs on others, boosting Vietnamese markets. 
7. US, India in Talks on Trade Deal That May Cut Tariff Below 20% - Joe Deaux, Shruti Srivastava, and Ruchi Bhatia, Bloomberg, July 11, 2025 
   The US and India are working on an interim trade deal that could set tariffs below 20%, down from the originally proposed 26%. India is not expected to receive a formal tariff letter like other nations. If finalized, India would join a short list of countries (alongside the UK and Vietnam) that have reached deals with the Trump administration ahead of the August 1 deadline. However, major unresolved issues include agricultural goods and pharmaceutical regulatory processes.  
8. Myanmar offers to send tariff negotiation team to US in reply to Trump – Nikkei Asia, July 11, 2025
   Military leader Min Aung Hlaing asked the US to reduce the 40% tariff on Myanmar exports to 10–20%, and proposed 0–10% tariffs on US goods. Trump’s letter lowering Myanmar’s tariff rate from 44% to 40% was notable because the US does not officially recognize Myanmar’s military government. Myanmar offered to send a high-level delegation to the US and requested the easing of sanctions targeting its military-linked economy. 

9. Liberation Day Round 2: The uncertainty continues – Deborah Elms, Hinrich Foundation, July 15, 2025 
   In Round 2 of Liberation Day, Donald Trump released a series of letters directed to government leaders via social media from 7 July, dictating US terms of trade that he described as “deals” reached on new tariff rates effective 1 August. By the end of the week, more than 25 letters had been sent. Just about the only thing that is clear is that the tariff roller coaster will continue. 

Copper tariffs 

Bloomberg asks whether Trump’s copper tariffs can work, but Keith Johnson in Foreign policy calls copper tariffs the “wrong fix”.  

Mentioned publications 

1. Trump’s US Copper Tariffs - What’s the Idea, and Can It Work? – James Attwood, Yvonne Yue Li, and Jack Ryan, Bloomberg, July 11, 2025 
   Trump announced a 50% tariff on copper imports starting August 1, doubling prior expectations. The tariffs are aimed at reviving US copper production and reducing reliance on imports. US copper buyers rushed to import and stockpile copper ahead of the deadline, driving record prices and creating big profits for traders. Trump cited national security concerns, overcapacity abroad, and foreign dumping, particularly from Chile (38%) and Canada (28%) to invoke emergency powers to fast-track mining development. Although the tariff can motivate domestic companies to invest in copper mining, building of new production capacity can take years, leaving US manufactures to face higher cost for metal than rivals overseas.  
2. Trump’s Copper Tariffs Are the Wrong Fix – Keith Johnson, Foreign Policy, July 10, 2025 
   Trump cited national security under Section 232 to justify the copper tariff, effective August 1. The move caused US copper prices to hit record highs, driving up costs for manufacturers and consumers. Analysts and economists called the policy economically counterproductive, increasing costs without guaranteeing supply gains. Domestic mining is slow and underdeveloped, with smelting capacity halved since 2000 and new mines taking decades to be productive. Even with new mines, the US will remain partially import-dependent for the foreseeable future. 

Long-Term impacts 

William Reinsch and Safae Irghis of CSIS see that trade liberalizing efforts in other countries are now contradicting US trade policies.   Bloomberg wants to know what comes after the trade war.  Alan Beattie in Financial Times opines that Trump’s tariff shambles are a warning to the rest of the world.  The New York Times writes that America’s allies want to redraw the trade map without the US. 

Mentioned publications 

1. Trade Liberalizing Efforts in Other Countries Contradict U.S. Policies – William A. Reinsch and Safae Irghis, Center for Strategic and International Studies, July 2, 2025 
   Both Trump and Biden have questioned the post–Bretton Woods trade system, albeit with different rationales. The US has not signed a new FTA since 2012 (Panama) and now emphasizes industrial policy and national security over trade liberalization. While the US steps back, other nations are pushing forward with regional and bilateral FTAs to diversify supply chains and secure stable market access. WTO-registered FTAs now total 619 as of 2025, showing that global trade liberalization continues, just without US leadership.  
2. What Comes After the Trade War? – Bloomberg, July 6, 2025 
   The future of the global trading system depends on whether the US remains protectionist or re-engages, and whether the world continues to follow WTO rules or shifts to geopolitical blocs. Bloomberg highlights four possible global trade scenarios for 2030 - WTO revival, US stays protectionist while others continue to maintain global rule, trade aligns along geopolitical lines or US, EU+ (with allies), and BRICS+ operate in silos. 
3. HF sponsored accessTrump’s tariff shambles is a helpful warning to the world – Alan Beattie, Financial Times Op-ed, July 10, 2025 
   The July 9 tariff deadline has been deferred, possibly to August or September, or indefinitely — casting doubt on Trump’s follow-through. Trump’s tariff campaign has been incoherent and poorly executed, serving as a cautionary tale, discouraging other governments from copying his approach. Trump’s trade agenda, like Brexit, was expected by some to spark imitation—but instead has reinforced support for multilateralism, especially within the EU. Post-WWII, the US led global trade liberalization; under Trump, it has reversed course, but few nations are following. The global consensus remains that protectionism harms the imposing country more than it helps. 
4. American Allies Want to Redraw the World’s Trade Map, Minus the U.S. – Jeanna Smialek, The New York Times, July 13, 2025 
   Trump announced 30% tariffs on EU goods effective August 1, with similar or higher rates on Mexico, Canada, Brazil, Thailand, and others. Trump’s abrupt moves are eroding trust and shifting global focus away from US leadership. Analysts predict US allies could begin coordinating retaliatory measures for greater impact. The idea of a new trading order excluding the US and China is gaining traction, with Europe exploring deeper ties with CPTPP members (e.g., Japan, Vietnam, Australia). 

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