Author: Jin Shi Data
From South Africa to Malaysia, negotiators from various countries negotiating trade agreements with the White House have received the 'reward' of having to wait three more weeks in a high-pressure environment.
On Monday, President Trump extended the deadline for countries to reach bilateral trade agreements to August 1. His statement carried a threatening tone — stating in letters to multiple leaders that starting next month, these countries' exports would face tariffs of 25% to 40%.
Market analyst Gabriel Rubin stated that this is essentially a reiteration of his 'liberation day' tariff threats, and his 'whack-a-mole' demands suggest that even if an agreement is reached, the outlook is not optimistic.
Rubin points out that the experiences of Japan and South Korea serve as a cautionary tale. In Trump's April trade statement, tariffs of 24% and 25% were imposed on the two countries, which were then postponed for negotiations. Afterward, he complained that Japan imported too little U.S. rice and cars.
But in fact, half of the rice imported duty-free by Japan comes from the United States; while the total U.S. rice export to the world is only about $2 billion, far below the $13 billion that Japan's tourism industry contributed to the U.S. economy in 2019 (U.S. State Department data). Despite this, Trump and his spokesperson Karoline Leavitt continue to cling to this issue.
South Korea's experience reflects the cost of 'not meeting Trump's sudden whims.' The free trade agreement between South Korea and the U.S. that took effect in 2012 did not prevent Trump's current comprehensive pressure. Currently, Trump's agenda may hinder South Korean industrial giants from expanding their capacity in the U.S. — recent cuts to electric vehicle subsidies could impact South Korean battery manufacturer SK On and automaker Hyundai.
For small countries, meeting Trump's tariff threats is even more challenging. Take Laos as an example, in 2024, the country's imports from the U.S. are valued at $40 million, while its exports to the U.S. reach $803 million. This scale is negligible in the context of the U.S.'s $1.2 trillion trade deficit, but Trump's promise of a 40% tariff on its exports would have a significant impact on Laos's economy of $16 billion.
Aside from lowering tariffs that have yet to be implemented, the benefits that countries can obtain from reaching an 'agreement' are actually quite vague. For example, in the temporary agreement announced by Trump regarding Vietnam, not only was a 20% tariff set, but additional tariffs were also imposed on 'goods from other countries re-exported through Vietnam.'
On Monday, for South Korea and Japan, which did not reach an agreement, Trump announced terms that also included this 're-export tax,' along with a baseline tax rate of 25%. According to the White House, Vietnam has even reduced its tariffs on U.S. goods to zero.
Meanwhile, Trump continues to target new 'thorns in his side' — such as threatening to impose an additional 10% tariff on BRICS countries. Whether this chaotic situation can truly come to an end remains uncertain.
For various countries, the best outcome might be a framework agreement similar to what the U.S. reached with the U.K.: only easing some trade barriers with little other change. Nonetheless, this is still a small victory for now and does not guarantee that Trump won't change his mind in the future.