Former President Donald Trump once promised “90 deals in 90 days” after taking a bold step to temporarily pause his aggressive plan of imposing “reciprocal” tariffs. Yet, as the self-imposed July 9 deadline approaches, not even nine deals have materialized—falling drastically short of expectations and raising serious questions about the efficacy of his tariff strategy.
The clearest sign that the strategy is faltering lies in the recent announcement that the White House will extend the deadline for new tariffs from July 9 to August 1, with hints that even further delays may be on the horizon. This latest move underlines the administration’s growing difficulties in navigating complex trade negotiations and securing tangible results.
From the U.S. perspective, the target remains unchanged: 18 countries that account for 95% of America’s trade deficit. However, the Trump administration’s current tactics—chiefly in the form of official letters sent to trade partners—appear to be an echo of its earlier, now infamous, “Liberation Day” tariff proposal board.
While Trump Tariffs tariff rates remain largely the same as those first announced back on April 2, the approach continues to reflect the flawed logic of equating a trade deficit with trade misconduct. Despite this, the latest delay in action has so far spared the markets from the kind of volatility seen earlier in the year.
“TACO” Effect: Trump Always Chickens Out?
Financial markets have started to price in what many call the “TACO” effect—Trump Always Chickens Out. This belief, that the administration talks tough but ultimately retreats from action, may be encouraging both U.S. and foreign negotiators to drag their feet in anticipation of further reversals. But it also leads to instability, leaving markets and industries in a state of uncertainty.
More importantly, this latest round of Trump tariff delays underscores a deeper problem: the administration’s failure to actually secure trade deals. The official letters, which many hoped would mark the beginning of new agreements, have instead served as indirect admissions of defeat.
In this global standoff, the U.S. isn’t the only player adopting a tough stance. Countries like Japan and South Korea have pushed back hard. The U.S. recently issued its first letters targeting trade deals with these two nations, which has only further strained relations.
Japan, in particular, has not masked its frustration. Finance officials have even alluded to leveraging the country’s massive holdings of U.S. Treasury bonds—the largest in the world—as a potential bargaining chip.
Despite all the rhetoric, little has changed since April. Global markets remain wary, and the economic consequences of a disrupted trade system are becoming increasingly clear.
Trump- As fears of a full-blown trade war mount, the dollar has dropped nearly 10% against a basket of global currencies this year. This is in direct contrast to statements made by Treasury Secretary Scott Bessent during his confirmation hearing, where he argued a rising dollar would mitigate tariff-driven inflation. Instead, the opposite has occurred.
Stockpiling of goods ahead of potential tariffs led to early trade spikes, but recent data show significant drops in volume. Chinese exports to the U.S., for example, are down 9.7%, while exports to the rest of the world have risen, including a 12.2% increase to ASEAN countries and a 7.4% jump to the UK.
While the data is volatile, the trend is clear: countries are adapting and redirecting their trade flows away from the U.S.
Meanwhile, the U.S. is beginning to see a short-term revenue windfall from tariffs. May saw record tariff receipts, boosting Treasury income. But this comes at a long-term cost—namely, America’s isolation in global trade. Recent economic pacts between the UK and India, and between the EU and Canada, show that other nations are eager to fill the void left by the U.S.’s retreat from open trade.
The effective tariff rate imposed by the U.S. on the rest of the world is now about 15%, a stark jump from the historical 2%–4% range maintained over the past 40 years. And that’s before the additional increases suggested in the latest letters.
Markets are calm—for now. But with deadlines shifting and deals failing to materialize, this moment of quiet could be the eye of the storm. The continued trend of Trump delaying tariffs may prevent immediate chaos, but it’s also undermining confidence in U.S. trade policy and encouraging other countries to forge new partnerships that bypass the U.S. altogether.
Source- BBC
