The Gains and Losses of the U.S. 90-Day Tariff Suspension

As the July 9 expiration of the U.S. “reciprocal tariffs” suspension period approached, President Donald Trump once again abruptly shifted course on the policy. On July 7 (local time), Trump signed an executive order extending the suspension period, delaying implementation from July 9 to August 1. Following the latest announcement, U.S. stock markets opened lower and closed even lower on Monday, with all three major indexes posting their worst single-day performance since mid-June.

Tariff Implementation Delayed Again

Although President Trump’s trade adviser Peter Navarro stated in April that the U.S. government would “secure 90 deals in 90 days,” officials have recently lowered expectations. On July 8, CNN reported that Trump sent letters on Monday to the leaders of 14 countries—including Japan and South Korea—announcing that their “reciprocal tariffs” would be raised from the current provisional rate of 10% to between 25% and 36%, effective August 1. All goods exported from Japan and South Korea—two key U.S. allies in East Asia—will face a steep 25% tariff.

Immediately after, on Monday, President Trump signed an executive order extending the implementation date for all “reciprocal tariffs”—except those targeting China—from July 9 to August 1.

According to a July 8 report by The Hindu, President Trump first announced the so-called “reciprocal tariffs” on April 2, triggering a sharp downturn in U.S. financial markets. Under mounting pressure, Trump suspended, revised, escalated, and downgraded dozens of tariffs. On April 9, he announced a 90-day suspension of high tariffs on certain trade partners. As The New York Times reported on July 7, during the 90-day period, the U.S. government worked to reach trade agreements with dozens of countries aimed at reducing economic barriers to U.S. exports and narrowing the trade deficit.

Now, with the July 9 suspension deadline expiring, the administration faces pressure to deliver concrete results. Despite months of talks with foreign officials and claims that deals with several partners were close, only two agreements have been formally announced: a 10% tariff will remain on goods from the United Kingdom, and Vietnamese goods will face a minimum 20% tariff. Reports suggest these deals lack detail and leave many issues unresolved. Negotiations with key partners such as the EU, Japan, South Korea, and India have made little headway.

If the U.S. fails to reach agreements with its major trade partners, it risks triggering a broader trade war. Several governments, including the EU, have already prepared retaliatory tariff plans targeting U.S. exports. European Commission President Ursula von der Leyen recently stated that the EU is “ready to reach a principled agreement” with the U.S. on tariffs—but warned that if talks collapse, the EU will take firm countermeasures to protect the European economy.

“For Every Job Created, Five Are Lost”

The chaos that began in April has yet to subside. President Trump raised tariffs to their highest levels in over a century, only to abruptly suspend many of them. Supporters argue that his tariff threats created leverage to secure new trade deals and better terms for American businesses and the economy. Critics, however, contend that the tariffs have disrupted global trade and financial markets, stripped businesses of the certainty they need to plan, driven up prices, reduced investment, and slowed economic growth.

Since the tariffs were announced, many companies—concerned about threats to their supply chains and production—have pledged tens of billions of dollars in investment in U.S. manufacturing. This has triggered a surge of manufacturing-related investment into the country.

However, a Goldman Sachs analysis found that the economic losses from the tariffs outweigh the gains: for every job created, five are lost. While tariffs have shielded some companies from foreign competition, they have also negatively affected U.S. manufacturers. Companies that rely on imported parts or raw materials face higher costs, and exporters are being hit by retaliatory tariffs from foreign governments. Some companies—such as Mack Trucks and Volvo—have already announced layoffs linked to tariffs.

“The uncertainty caused by tariff threats appears to be slowing investment and hiring,” The New York Times reported. Since Trump’s election victory last November, factory construction spending in the U.S. has declined, along with the number of manufacturing jobs. Trade experts told CBS News that “the uncertainty from tariff threats is putting capital on hold. If you can’t predict your costs a week from now, how can you plan for the year ahead? That uncertainty is choking off investment and broader economic growth.”

At the same time, foreign capital is increasingly “fleeing” the U.S. A July 7 survey by Deloitte found that only 2% of CFOs at large U.K. firms still view the U.S. as an attractive investment destination—down sharply from 59% at the end of 2024, before Trump took office. Official data also show that foreign direct investment in the U.S. fell 5.2% in the second quarter.

There is also mounting evidence that U.S. inflationary pressures could intensify. A report from Goldman Sachs estimates that companies will pass on 60% of tariff costs to consumers. Economic confidence is starting to erode. In the first quarter of this year, consumer spending in the U.S. grew at its slowest rate since 2020—and in May, it unexpectedly declined.

Further signs of economic slowdown are emerging. According to the BBC, U.S. retail sales fell 0.9% from April to May—the second consecutive monthly drop and the first back-to-back decline since the end of 2023.

“Investors Actively Hedge Against Pressure”

Nefton, a foreign exchange trader at a U.S. fintech firm, wrote in a client report that market volatility appears inevitable once the tariff suspension officially ends and new tariff levels are announced. However, he noted that the impact this time may be more moderate. In fact, Reuters reported on July 7 that investors have grown numb and fatigued by the ongoing U.S. tariff deadlines. Many expect that Trump is unlikely to reach deals with all U.S. trade partners in the short term.

Nigel Green, CEO of global financial advisory firm deVere Group, said, “Waiting for certainty is not a strategy. Investors are increasingly avoiding overexposure to U.S.-linked assets and are boosting their exposure to regions actively hedging against U.S. pressure—particularly Asia, Latin America, and the Middle East.” This shift is already reflected in the markets: the U.S. dollar index declined again on Monday, gold prices held steady near $2,370 per ounce, and Bitcoin surged past $109,000—its highest level in a month—as global capital seeks security beyond sovereign systems.

Green added, “Investors are responding—not with panic, but through reallocation of assets. Washington is weaponizing trade. The world is responding by building defenses—this will have lasting consequences for markets, and for both the U.S. and global economies.”