Trump's Trade Deal Meltdown Is the Economy Next?

Trump's Trade Deals: Stalling Out at the Worst Possible Time?

With the clock ticking on President Trump's "Liberation Day" tariffs, the White House finds itself in a race against time to finalize trade deals. These agreements are seen as crucial to injecting certainty into an increasingly nervous economy. But are they achievable within the rapidly shrinking window?

Originally touted as imminent, these trade deals, designed to lower trade barriers with key partners, now appear increasingly unlikely to materialize by the July 9th deadline. This delay comes at a particularly precarious moment, as signs suggest the U.S. economy might be losing steam.

Promises vs. Reality: A Timeline of Shifting Deadlines

The Trump administration has repeatedly indicated that deals were just around the corner.

• Late April: Trump claimed in a Time interview to have "made all the deals," totaling "200 deals."
• Subsequent Weeks: He later acknowledged that such a high volume of agreements was unrealistic in the short term.
• April 23rd: A "tariff" was to be set for countries failing to negotiate new terms "in the following few weeks."
• May 16th: Within "two to three weeks," countries would be informed of what they'd "be paying to do business in the United States."
• June 11th: Commerce Secretary Howard Lutnick promised a "flood of deals" starting the following week. He later indicated 10 deals would be announced "imminently."

However, the narrative has since shifted. White House Press Secretary Karoline Leavitt downplayed the urgency of the July 9th deadline, and Treasury Secretary Scott Bessent suggested negotiations could extend until Labor Day.

Potential for More Aggressive Trade Policies

Adding to the uncertainty, Trump recently announced the U.S. withdrawal from trade talks with Canada due to its digital services tax, hinting at new tariffs for its northern neighbor. Bessent also indicated that around **20 countries** could revert to their "Liberation Day" tariff rates starting July 9th.

"The idea that uncertainty will be resolved early this summer appears to be completely dead," notes Justin Wolfers, an economics professor at the University of Michigan. "This means tariff aggression is not dead. That’s probably not super surprising but some of us allowed ourselves moments of optimism."

Economic Warning Signs: A Perfect Storm?

The delayed trade deals are particularly concerning given emerging weaknesses in the U.S. economy.

• Consumer sentiment, while rebounding, remains weak.
• Consumer spending unexpectedly fell in May, the first decline since January.
• Inflation is showing signs of increasing.
• Job growth is slowing.
• Retail sales are declining.

These factors raise concerns about the overall health of the economy, especially considering that consumer spending accounts for two-thirds of U.S. economic activity.

"Households are anxious about what tariff-induced price hikes will do to their spending power, while concerns about the robustness of the jobs market are on the rise," explains James Knightley, chief US economist for ING.

The Risk of Retaliation

Economists warn that higher prices resulting from tariffs may be starting to affect the economy. Moreover, Trump's trade war risks retaliation from key trading partners, potentially slowing the U.S. economy and increasing the risk of a recession.

Michel Nies, an economist at Citi, emphasizes that "Trading partners taking retaliatory action could have a lasting impact on US output and, accordingly, public finances."

The Bottom Line

While the U.S. economy remains relatively strong, cracks are beginning to appear. Tariffs are a significant contributing factor, and further delays in securing trade deals will only exacerbate uncertainty. The pressure is on to find solutions before the current "good vibes" take a turn for the worse, potentially impacting both businesses and consumers alike.

Tags: Trump Tariffs, Trade Deals, US Economy, Trade Barriers, July 9 Deadline, Trade Negotiations, White House, Global Trade, Donald Trump, Trade War

Source: https://edition.cnn.com/2025/06/28/economy/trade-deals-tariffs-trump