Trade Deal Cliffhanger Will Tariffs Topple the Agreement?

Threat of More Tariffs Hangs Over Countries Negotiating Trade Deals

The global trade landscape is becoming increasingly complex, with the looming threat of new tariffs casting a shadow over ongoing trade negotiations. As nations grapple with economic uncertainties and strive to secure advantageous trade agreements, the potential imposition of tariffs is creating significant hesitation and strategic maneuvering.

At the heart of this uncertainty are trade investigations being conducted by the Commerce Department into key sectors such as:

• Lumber and Timber
• Copper
• Critical Minerals

Sources familiar with the matter indicate that these investigations are nearing completion and are expected to be submitted to the White House soon. A determination that imports of these products pose a national security threat could empower the President to impose tariffs in the coming weeks. Furthermore, investigations into pharmaceuticals, semiconductors, and electronic devices are also underway, potentially leading to further tariffs as early as next month.

It’s important to note that these potential tariffs on items like lumber are being pursued independently from the reciprocal tariffs announced earlier this year. According to reports, these tariffs on critical sectors are being considered under Section 232 of the Trade Expansion Act of 1962. This act allows for tariffs aimed at bolstering domestic production capacity for essential goods, ensuring the nation isn't overly reliant on foreign suppliers during times of crisis or conflict.

These sectors are of critical importance to major US trading partners like Japan, the European Union, and India. These governments are wary of entering trade agreements with the U.S. due to concerns about facing additional tariffs in the future. For some, these national security tariffs are a greater worry than the reciprocal tariffs threatened on their U.S. exports.

The potential impact of these tariffs is substantial. For example, for the EU, tariffs on medicines—their leading export to the U.S.—could be particularly damaging. It's unclear whether the existing draft trade deal between the U.S. and the EU addresses this concern. Friedrich Merz, a prominent German figure, has advocated for negotiations to prioritize key sectors, including medical drugs.

Key Takeaways:

• New tariffs are potentially on the horizon, pending the outcome of Commerce Department investigations.
• Section 232 of the Trade Expansion Act is being considered as justification for these tariffs, citing national security concerns.
• Major trading partners are hesitant to finalize deals due to the risk of future tariffs.
• Specific sectors, such as pharmaceuticals for the EU, could face significant economic impact.

The prospect of more tariffs is undoubtedly adding complexity and tension to international trade negotiations. It remains to be seen how these investigations will conclude and what measures, if any, will be implemented. The consequences could reshape trade relationships and redefine the global economic order.

Tags: Trade tariffs, US tariffs, Import tariffs, National security, Trade investigation, Lumber tariffs, Copper tariffs, Critical minerals, Section 232, Trade expansion act

Source: https://www.nytimes.com/2025/06/30/business/economy/trump-tariffs-trade-deals.html