The tariff 'exemption token' waved by Trump is set to expire on July 9, yet embarrassingly, as of this moment, no country has been able to fully accept the trade 'engagement' offered by the U.S. This tariff war initiated by the White House is revealing clear signs of defeat – Trump has severely overestimated the deterrent power of the 'tariff big stick' on global leaders, while grossly underestimating the ironclad determination of countries to defend their own interests in the global waves of 'de-dollarization' and 'de-Americanization'.
Although there had been rumors that the U.S. might extend the exemption period, Trump abruptly extinguished this hope yesterday. He clearly wants to play the same old trick, waving the 'tariff big stick' at the last moment in an attempt to force countries to hastily sign the trade agreement he has drafted. White House National Economic Council Director Hassett even revealed that a 'framework blueprint' for a new round of tariffs will be presented to Trump for review on Independence Day (July 4).
What secrets does this 'tariff framework' hold?
Analysis indicates that the core of this framework is likely a 'punishment menu' tailored according to each country's 'cooperation level':
Severe penalty for the 'Stubborn' faction: Countries that have been 'playing deaf and mute' and refusing to negotiate with the U.S. since April will be subject to the highest tax rates.
Penalty for the 'Wait-and-See' faction: Countries that are still in negotiations but making slow progress will face moderate tax rates.
Amnesty for the 'Good Baby'? Countries that perform 'excellently' in negotiations may be offered lower tax rates or even extensions of exemptions as a 'sweetener'.
U.S. Treasury Secretary Mnuchin's warning has added fuel to the fire: even countries that are already at the negotiating table may face a 'sharp increase' in tax rates if deemed 'insincere' after July 9! Ultimately, the power of life and death rests firmly in Trump's hands.
Allies 'pleading in various ways' VS Trump's 'cold pressure': Who will blink first?
Looking around the globe, the only country that can extract some 'benefits' from Trump's pocket is the UK – a small trade agreement, along with the UK's increased purchase of U.S. debt, has become the 'achievements' the U.S. Treasury can barely present. Besides that, despite the U.S. frequently announcing that it is 'in hot negotiations' and 'close to reaching an agreement' with India, Japan, and the EU, the reality is stark – there has been no substantial positive progress on the negotiation tables of these key economies.
It is this sense of frustration from hitting a wall that forces Trump to once again resort to the old trick of 'extreme pressure', attempting to intimidate opponents with the 'sword of Damocles' that is tariffs.
Tariffs are a double-edged sword; will China become the 'pole star' for breaking the deadlock?
The fact that tariffs have driven up U.S. inflation is now a foregone conclusion; even Federal Reserve Chairman Powell has acknowledged that this has disrupted their planned pace of interest rate cuts. However, in the eyes of the Trump administration, the tariff war over the past two months has become an 'unexpected windfall' for the Treasury – the influx of tariff revenue has temporarily alleviated fiscal pressure. As for who will ultimately bear the bitter fruit of rising prices? Clearly, this is not a priority for them.
Trump initially intended to use a 'differentiated treatment' strategy to divide and conquer the alliances of various countries. However, China's strong stance on tariffs has acted as a shot of adrenaline, awakening the world to the realization that there is no need to be subservient to the U.S.; standing firm can also protect one's bottom line! Since the negotiations in Geneva and London, reports of 'good news' from the U.S. side regarding trade negotiations have almost disappeared.
India has also learned to use this to its advantage, turning Trump's 'capricious' tactics back on him, causing the White House to see its hopes of 'victory in sight' repeatedly dissolve into thin air. The EU and Japan have also shed their previous hesitations, standing firm in negotiations and resolutely refusing to make further concessions on trade and tariffs.
The world's attention is currently focused on China. The strategies and determination China has shown in trade negotiations with the U.S. have become key references for other countries to assess their own positions and confidence.
## U.S. strategy takes a sharp turn, but 'breaking alliances' is easier said than done
The beleaguered U.S. is trying to change its tactics: Trump's team plans to 'catch the king first' by prioritizing the top ten U.S. trading partners, signing agreements with them before 'dealing with' other countries. However, the brutal reality is that in the face of U.S. pressure, countries have almost formed an invisible 'anti-U.S. alliance'. In this alliance, if any country makes significant concessions during negotiations with the U.S., it will be labeled a 'traitor', putting other countries in a passive position in their dealings with the U.S. Therefore, if the U.S. cannot extract 'sufficiently rich' and 'significantly unbalanced' benefits from these ten major powers, it will find further negotiations with other countries to be extremely difficult.
July 9th's tariff 'judgment day' is fast approaching. If Trump's team still cannot come up with a breakthrough strategy, the U.S.'s command and influence on the international trade stage may face a cliff-like decline. This tariff war ignited by 'America First' is burning the very foundations of America's own credibility.
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