Trump’s July 9 deadline approaches

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To negotiate a trade agreement | A WTO without the US? | Iran’s retaliation and trade | Evaluating tariff revenue

To negotiate a trade agreement 

The New York Times reports that China has confirmed a trade framework with the US to lift export controls, while Trump announces he will terminate talks with Canada in response to their digital services tax, per Bloomberg. The Economist writes that India is getting no favors from Trump and Bloomberg writes about the EU’s warning that even a baseline tariff will spur retaliation.  The US and the UK have formalized their agreement, though details are still to come, per Reuters. The Financial Times covers the UK’s new trade strategy, reflecting their agreement with the US and other economic imperatives. 

Mentioned publications 

1. China Confirms Trade Framework with U.S. to Lift Export Controls – David Pierson, The New York Times, June 27, 2025
   China and the US confirmed a trade framework under which China will accelerate rare earth exports, and the US will lift certain export controls on China. The US restrictions on ethane, jet engines, and chip software are expected to be removed. The deal aims to ease tensions after a period of tit-for-tat tariffs and export curbs; recent meetings in London and Geneva helped stabilize ties. 
2. Trump Turns on ‘Nice’ Carney with Canadian Tech Tax Ultimatum – Thomas Seal, Bloomberg, June 28, 2025
   President Trump threatened to end US-Canada trade talks in retaliation for Canada’s digital services tax, which mainly targets large US tech firms like Meta and Amazon. The 3% digital tax, created in 2022, was introduced under Trudeau and implemented by Carney’s government despite prior US warnings of retaliation. Critics argue the standoff was avoidable with a delay or negotiation, while others see conflict with Trump as inevitable given other US-Canada trade irritants. 
3. India gets no favours from Trump – The Economist, June 26, 2025 
   Early optimism over an interim trade deal between India and the US has faded as positions hardened and trust eroded, with India resisting US demands for greater access for American farm products and other agricultural goods. Domestic pressures—from farmers, business elites, and nationalist groups—limit Prime Minister Modi’s room to make concessions, while US tactics are seen as coercive. Trump’s overtures to Pakistan and use of trade as leverage have further soured ties, making a deal harder to reach before the July 9 tariff deadline. 
4. EU Warns a Baseline Trump Tariff Would Still Spur Retaliation – Jorge Valero, Bloomberg, June 25, 2025 
   The EU plans retaliatory tariffs on US goods, including on Boeing Co. aircraft, if President Trump imposes a baseline levy or keeps asymmetric duties in place after negotiations. The EU is racing to secure a deal before July 9, when US tariffs on nearly all EU exports could rise to 50%. Officials fear the US will maintain high tariffs even if a deal is reached. The EU has already approved tariffs on billions worth of US goods to implement in response to US tariffs and quotas.  
5. US and UK announce a trade deal, but steel imports unresolved – Jarrett Renshaw and Andrea Shalal, Reuters, June 17, 2025
   Trump and Starmer announced an agreement lowering some US tariffs on UK imports, including eliminating aerospace tariffs and setting quotas and reduced rates for British automobiles. However, steel and aluminum issues remain partly unresolved. The US will allow 100,000 UK cars annually at a 10% tariff and plans a quota on UK steel and aluminum exempt from 25% tariffs, contingent on UK supply chain security. 
   • Implementing the General Terms of the United States of America-United Kingdom Economic Prosperity Deal – The White House, June 16, 2025

6. HF sponsored accessUK to focus new trade strategy on boosting services exports – Financial Times, June 26, 2025
   Prime Minister Starmer will launch a new trade strategy focused on boosting UK services exports, tackling regulatory barriers, and enhancing trade defenses against dumping amid Trump’s global tariff actions. The strategy includes raising UK Export Finance capacity to £80bn, creating a "Ricardo fund" to break down barriers to services trade, and consulting on anti-dumping measures for steel.

A WTO without the US?  

Henrik Horn and Petros C. Mavroidis in VOXEU/CEPR explain why the US and the WTO should part ways and the FT reports on WTO DG Ngozi’s warning over US bilateral tariff deals. Cullen S. Hendrix of the Peterson Institute for International Economics considers why the developing world still needs the WTO.  Robert Wolfe and Peter Ungphakorn present a draft paper on emerging powers and the shifting patterns of influence in the WTO. Maria Pagan, writes for the Hinrich Foundation about understanding America’s frustration with the WTO. Keith M. Rockwell, writes for the Hinrich Foundation about the need for WTO reforms.  

Mentioned publications 

1. Why the US and the WTO should part ways – Henrik Horn and Petros C. Mavroidis, VOXEU/CEPR, June 25, 2025
   Trump’s second presidency has triggered massive US violations of WTO rules including tariff bindings, violations of MFN clause, non-payment of membership dues and blocking Appellate Body appointments. Unlike past US frustrations with WTO rulings on safeguard and anti-dumping measures, the current administration rejects core tariff disciplines, seeking unilateral flexibility beyond what WTO rules permit. The authors argue that these violations are likely to continue and that a US withdrawal would be cleaner for the WTO than continued violations.  
2. HF sponsored accessWTO chief warns US bilateral tariff deals could put trade principle at risk – Leo Lewis, Financial Times, May 15, 2025 
   WTO Director-General Ngozi Okonjo-Iweala cautioned that bilateral tariff deals like the recent US-UK pact threaten the most-favoured nation (MFN) principle, a core pillar of the global trading system. Despite a US-China tariff truce, Okonjo-Iweala noted that past tit-for-tat tariffs and broader trade fragmentation could slash real global GDP by up to 7% long term—worse than the 2008-09 financial crisis. 
3. Why the (developing) world still needs the WTO – Cullen S. Hendrix, Peterson Institute for International Economics, April 10, 2025 
   Despite US hostility and dysfunction, the WTO offers developing nations influence in setting rules, predictable market access, special and differential treatment, and veto power to block harmful policies, helping safeguard their interests. While imperfect, the WTO is still the best framework available for advancing their prosperity. 
4. Emerging powers and the shifting patterns of influence in the WTO – Robert Wolfe and Peter Ungphakorn, SSRN, May 15, 2025
   As power in global trade shifts, the World Trade Organization reflects the growing influence of emerging powers like Brazil, China, and India. These countries have both material and institutional clout and view WTO rules as legitimate. Their changing aspirations are reshaping trade dynamics with concentration on issues like special and differential treatment and dispute settlement. 
5. In search of a clearer tune: Understanding America’s frustration with the WTO – Maria Pagan, Hinrich Foundation, May 27, 2025 
   The strain between the United States and the WTO didn't happen overnight. It was a long-drawn clash between what a sovereign nation was willing to give up in the bargain to build a multilateral trading system and what it felt it got in return. In an essay written for the Hinrich Foundation, Maria Pagan, the former and most recent US ambassador to the WTO, lays out the provenance of America’s frustration with the global trade institution – and why the US still should not walk away from it. 
6. The WTO needs reform. Here’s how to do it – Keith M. Rockwell, Hinrich Foundation, May 06, 2025 
   Trump’s announcement of "reciprocal" tariffs is but the latest in a string of blows that have crippled the global trading system. Much of the problem facing the WTO lies with the organization itself. The principles behind the body's creation are noble and worthy, but their practical application has deadlocked negotiations, dispute resolution, and even the procedures of conducting meetings. 

Iran’s retaliation and trade 

Will Iran retaliate in response to Israeli and US bombings by closing the Strait of Hormuz to trade? Nikkei Asia covers why Asia stands to lose. 

Mentioned publications 

1. Why Asia stands to lose if Iran chokes off Strait of Hormuz – Shotaro Tani, Nikkei Asia, June 23, 2025 
   Asia is highly vulnerable to any closure of the Strait of Hormuz, a vital route for Middle Eastern oil and gas shipments. Following the US strikes on Iranian nuclear facilities, Iran’s parliament has approved choking off the straits. Asian economies, especially China and India, would be highly affected as the region receives ‘80%’ of the crude oil shipment through this waterway. 

Evaluating tariff revenue 

Politico presents an interesting set of graphics tracking whether tariffs are making money and economic warning signs to watch. 

Mentioned publications 

1. Are Trump’s tariffs making money? Watch this chart. – Politico, June 25, 2025 
   Trump’s tariffs have generated $95.6 billion so far in 2025 — a 134.9% increase year-on-year — but that’s still tiny compared to $2.4 trillion from federal income taxes in 2024. With a series of “reciprocal tariffs” and tit-for-tat escalations, revenues are undergoing constant fluctuations. Track these fluctuations with Politico graphs.  

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