July 8 Tariff Deadline Nears: Updates on Key Negotiations

As the exemption for reciprocal tariffs nears its expiration date of July 8, U.S. trade negotiators are currently working to finalize agreements before the deadline. Although only the U.K. has reached a confirmed deal, negotiations with major trade partners such as India, South Africa, and the European Union continue. American Treasury Secretary Scott Bessent has indicated that the July 8 tariff deadline could be extended on a case-by-case basis for countries engaged in ongoing good-faith negotiations with the United States.  

Meanwhile, following a lower court ruling against the legality of some of the U.S. tariffs, the Federal Circuit Court of Appeals has temporarily allowed the tariffs to remain in place until a higher ruling is issued. The Court will hear oral arguments on July 31, indicating that the tariffs will remain in place until at least this date.  

U.S. and China propose agreement on export controls

On June 10, the United States and China reached a new agreement on tariff rates following negotiations in London. Under the deal, the U.S. will lift some export controls on unspecified products, though it will not remove export restrictions on high-tech chips. In return, China agreed to remove limits on export licenses for rare earth minerals to U.S. companies. However, China has so far only committed to issuing six-month licenses, allowing room to revisit the decision later.  

Despite these adjustments, the U.S. will maintain a 55% tariff rate on Chinese goods—comprising a 10% baseline tariff, 20% in response to the fentanyl crisis, and 25% on specific products still under tariffs from former President Trump’s first term as per the 90-day agreement reached by the U.S. and China in May. U.S. Commerce Secretary Howard Lutnick stated that this rate will remain unchanged. Both U.S. President Donald Trump and Chinese President Xi Jinping have yet to formally approve the June 10 agreement, and the full agreement is unlikely to be published before this happens. Additionally, a more comprehensive deal detailing more permanent progress on tariff rates is expected to be finalized by the August 10 deadline.  

In a separate measure, Taiwan added the Chinese corporations Huawei Technologies Co. and Semiconductor Manufacturing International Corp. (SMIC), along with their subsidiaries, to its entity list. As a result, local companies must now secure government approval before exporting any goods to these firms. The new controls are likely to limit these firms’ access to Taiwanese semiconductor equipment and plant construction technologies, and could prompt countermeasures from the Chinese side.  

Canada threatens counter-tariffs on global steel and aluminum products

U.S. tariffs on many Canadian goods remain in place, and Canada has continued negotiations with the U.S. throughout the past few weeks. Canadian Prime Minister Mark Carney has indicated that the countries are inching closer to a deal, which could come within the next 30 days. However, President Trump noted that while a deal was ultimately likely, significant differences remain.  

Tensions rose after President Trump increased his global tariffs on steel and aluminum products to 50%. Effective June 23, these tariffs will also apply to imports of household appliances such as washers, dryers, refrigerators, and dishwashers containing steel. Canada is disproportionately impacted by these tariffs, as the supplier of over half of U.S. aluminum imports and the number-one exporter of steel to the U.S. Canada has also raised concerns that the U.S. tariff could result in other steelmakers dumping low-cost steel and aluminum goods into Canada, threatening domestic production.  

As a result, the Canadian government announced countermeasures, which will be enacted on July 21 if no deal is reached with the U.S. government. Under the proposed measures, Canada will raise tariffs on U.S. steel and aluminum to an unspecified amount. Official statements indicate the level of the tariff will depend on the progress made in a U.S.-Canada steel agreement by July 21. Canada will also enact quotas for global steel and aluminum imports not covered by free trade agreements, with the quota level set as equal to 100% of steel and aluminum imports in 2024. The government has further threatened to examine additional trade restrictions in the coming weeks to address global steel and aluminum overcapacity and alleged unfair trade practices.  

E.U. continues to negotiate reciprocal tariff and U.K. finalizes U.S. trade deal 

Table 1: Current status of global tariff negotiations with the U.S. (source: Everstream Analytics). 

Among the countries still in reciprocal tariff talks, the European Union is expected to be one of the last to finalize a deal. While the E.U. faces a July 9 deadline, some officials have suggested that a basic framework could be reached then, with full negotiations possibly continuing beyond that date. Reports suggest that U.S. tariffs on the E.U. are unlikely to ultimately drop below the global 10% baseline tariff rate, although E.U. negotiators continue to push for a rate below 10%.

Meanwhile, the United Kingdom has finalized its agreement with the U.S. Under the deal, the 10% U.S. baseline tariff will remain in place, but the U.K. will be exempt from global 50% tariffs on steel and aluminum, instead maintaining its current 25% rate. The U.S. tariff on finished automobile imports will also be reduced from 25% to 10%, and tariffs on airplane parts will be lowered. In return, the U.K. has committed to cutting tariffs on U.S. beef, ethanol, sports equipment, and other goods, and has agreed to purchase $10 billion worth of Boeing aircraft. 

Table 2: Key dates for upcoming trade restrictions (source: Everstream Analytics). 

Everstream clients are receiving more detailed insights and recommendations about this risk. 

Don’t miss key supply chain risk updates! Subscribe now to get supply chain news, weather updates, forecasts, and other insights.