The move extends Trump’s aggressive tariff agenda, initiated during his “Liberation Day” announcement in April, when he invoked emergency powers to impose a universal 10% tariff on nearly all imports and additional duties up to 50% on select goods. The new letters target smaller nations "we're really not negotiating with," as Trump put it, suggesting these countries have limited trade volume with the US.
Trump indicated that major economies such as India, the EU, Japan and South Korea have already received individual tariff notifications. Tokyo and Seoul are set to maintain tariffs of 25%, while Canada faces a 35% levy from August 1. Negotiations with India are said to be near completion, potentially exempting it from these new duties.
Analysts warn that blanket notices, lacking tailored negotiation, could sow diplomatic and economic discord. The European Union is reportedly preparing retaliatory tariffs in response to Trump’s threats of a 30% levy if no deal is reached by August 1. Brazilian President Luiz Inácio Lula da Silva has already denounced a different letter threatening a 50% tariff, vowing a robust response.
Investors and businesses have expressed unease. ASML, the Dutch semiconductor-equipment maker, withdrew optimism around its 2026 growth forecast, citing macroeconomic instability—likely a reference to the broadening trade tensions. Global stock markets, which earlier stabilised following more modest tariff actions, are bracing for fresh volatility.
The White House economic team, including Chief Economist Kevin Hassett and Treasury Secretary Scott Bessent, stresses that the letters are strategic leverage rather than fait accompli. Deals with the UK and Vietnam have led to exemptions or lowered tariffs, including a 20% rate for Vietnam and duty-free access for US exports. Trump described sending letters as more efficient than protracted negotiations, stating: “The letters are better”.
As for timing, the tariffs and accompanying duties are scheduled to take effect on 1 August, following the expiry of a 90-day pause established after the April announcement. Trump’s aides note that some nations demonstrating earnest negotiation could receive deadline extensions.
Underlying the policy is a drive to reduce the US trade deficit—estimated at around US$1.2 trillion—with Trump’s trade representative Jamieson Greer framing the tariffs as a tool to protect domestic manufacturing. Critics contend the approach undermines established trade norms, risks sparking broad retaliatory measures, and might lead to inflationary pressure on American households.
Diplomatic frictions are already emerging. Canada’s Prime Minister Mark Carney has emphasised steadfast defence of Canadian interests in response to the 35% tariff threat and highlighted cross-border opioid cooperation amid Trump’s linkage of tariffs to fentanyl policy. Brazil has vowed a firm counterattack on newly announced levies on coffee and orange juice imports. The EU has signalled it is ready to retaliate but would hold off if an agreement is reached.
Domestic ramifications loom as well. Heightened tariffs could lead to increased consumer prices on imported goods and disrupted supply chains, posing challenges for US manufacturers reliant on foreign inputs. Fed Chair Jerome Powell previously cautioned that Trump's tariff strategy could fuel inflation and alter economic forecasts. Meanwhile, companies like ASML are already signalling uncertainty.
Entering a critical window, Trump’s strategy hinges on a dual track: letters signalling tough stances, and negotiations holding out possibilities for exemptions. With a deadline looming, governments worldwide are weighing whether to strike deals to avoid uniform tariffs—or prepare to respond in kind.