Trade Tidbits – July 8, 2025

Read Letter Day

Way back on May 16, President Donald Trump floated the idea of sending trading partners letters “telling people what they’ll be paying to do business in the United States.” At the time, he said the letters would go out in two to three weeks. The timeframe slipped, but once-ish a week, he’d reiterate the threat.

On Thursday, President Trump said he’d begin sending the letters the next day. He told reporters, “By the [July 9] they’ll be fully recovered,” and added, “They’ll range in value from maybe 60 or 70% tariffs to 10 and 20% tariffs.” He also floated a new August 1 deadline, an apparent push from the July 9 deadline. The August 1 date was repeated by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick on Sunday. And when you see this type of synchronization, the ol’ spidey sense gets a little tingle. Then again, on Monday, President Trump called August 1 “firm but not 100% firm” depending on the state of negotiations. But he also just truthed: “No extensions will be granted.”

And so it was Sunday night, President Trump truthed that the letters would be delivered at noon Monday. At 12:18pm on Monday, the truths started flowing. We have 14 so far, which are in the below table with a link, rate, and the threatened Liberation Day rate, which differs in some cases. I’m going in chronological rather than alphabetical order because it seems like there was a method to the madness there.

An Executive Order codified the new August 1 deadline, but didn’t elaborate much more than that. So let’s walk through some observations and questions on the letters.

• Without going through and redlining, it *appears* on a glance that they’re identical, minus the rate and country. They note that products from [insert country here] will face a [insert rate]% tariff, which is separate from the “Sectoral” (Section 232) tariffs. But there will also be a higher rate on transshipped goods. That’s a newer feature as of last week’s Vietnam deal and seems to still be relatively undefined.
• 8 of the 14 countries got rate cuts compared to Liberation Day ranging from 2-13%; 2 got 1% increases; 4 got the same rate as Liberation Day.
• 10 of the 14 countries are in Asia (6 Southeast, 2 East, 1 Central, 1 South); 2 are in Africa; 2 are in Europe.
• Will we get more letters? Secretary Bessent said over the weekend that 100 countries would get letters snapping back to Liberation Day tariff rates. And don’t forget President Trump’s comment that the letters would be “fully covered” by tomorrow.
• Back in May, we got 17 of the 18 priority countries for negotiations (Australia, Argentina, Cambodia, Ecuador, Fiji, Indonesia, Israel, Japan, Lesotho, Madagascar, Malaysia, Mauritius, South Korea, Switzerland, Taiwan, the UK, and Vietnam). 5 got letters; 2 have deals.
• Does this bode well for priority negotiating partners that didn’t get a letter? For example, the EU wasn’t on the priority list, and *says* it doesn’t expect to get a letter as it pushes for a deal this week. India didn’t get one either. Secretary Bessent said yesterday that there’d be more trade announcements in the next 48 hours.
• Yes, Japan and South Korea were the first letters out the gate, but this gives them some political space too. Japan has an upper house election on July 20, which could give the fragile majority some breathing room. And South Korea’s been asking for more runway on account of the new government taking office just over a month ago. The New York Times reported South Korean officials were “relieved” at the news.

Before closing this section out, I’ll flag that Senate Finance Committee Ranking Member Ron Wyden (D-OR) released a statement panning the punt. No other Senate Finance or House Ways and Means Committee leader did a statement for/against as of writing.