President Donald Trump, after pausing his proposed reciprocal tariffs on most nations the previous month, asserted that countries were eager to negotiate trade agreements. On May 8th, the Republican president secured one such agreement, announcing a trade deal with the United Kingdom. However, Trump faces the task of forging numerous additional deals within a relatively short timeframe, involving significantly larger U.S. trading partners such as China, Mexico, and Canada, potentially leading to more complex negotiations.
Trump initially announced the reciprocal tariffs on April 2nd but temporarily suspended them for 90 days on April 9th, excluding China, amidst concerns about plummeting financial markets and other concerning economic indicators. Following the pause, markets rebounded, with the S&P 500 returning to its position from over a month prior and experiencing further gains after the U.K. announcement.
Addressing Wall Street’s concerns about his economic agenda on May 8th, Trump declared, "This is just the beginning." However, uncertainty surrounding Trump’s tariff plans persists, fueling speculation about potential off-ramps or the potential for renewed trade wars with various nations.
The primary concerns revolve around China, which continues to face substantial tariffs and has responded with its own levies on U.S. goods. Initial signs of de-escalation are beginning to emerge between the world’s two largest economies.
One month into Trump’s 90-day reciprocal tariff pause, the focus remains on the status of the GOP-led administration’s trade agenda. Facing immense pressure to demonstrate the benefits of his trade policies, Trump celebrated the initial tangible outcome with the May 8th announcement in the Oval Office, joined by his economic team, the U.K. ambassador, and the U.K. prime minister via telephone.
Trump lauded the deal as "very big" and "maxed out," despite skepticism regarding its significance.
While a universal 10% tariff on U.K. goods will remain, the agreement entails the United States reducing automobile tariffs from 25% to 10% on U.K. vehicles. Additionally, the U.K. announced that the 25% steel tariffs imposed by the U.S. were reduced to zero.
In return, U.S. officials stated they are gaining billions of dollars in access for U.S. agricultural products, including beef and ethanol.
Trump suggested that future deals may be less favorable for foreign nations than the agreement with the U.K., indicating that instead of maintaining the universal 10% tariff, they could result in higher tariffs.
"The template of 10 is probably the lowest," he stated.
The United States and the U.K. have historically maintained a close relationship. Trump never imposed reciprocal tariffs on the U.K. In announcing the trade deal, he praised the U.K.’s luxury automobiles, such as Bentley, Jaguar, and Rolls-Royce, and mentioned his golf courses in the country.
Trump indicated during the U.K. announcement that "numerous deals" are in progress but did not provide specific details.
Treasury Secretary Scott Bessent informed lawmakers during a May 6th committee hearing that, excluding China, negotiations have commenced with the 18 countries he identified as "major trading partners." Bessent traveled to Switzerland on May 8th to meet with Chinese economic officials for the first time.
Regarding the prospects of signing trade deals with major trading partners, Bessent stated, "I would be surprised if we don’t have more than 80% or 90% of those wrapped up by the end of the year, and that may be much sooner." He added, "Many of our trading partners have approached us with very good offers, and we are in the process of renegotiating those."
Trump is scheduled to travel to the Middle East the following week, where the United States has significant trade and security interests, and economic issues will be a primary focus.
Prior to the U.K. deal announcement, Trump expressed frustration with the constant inquiries about trade negotiations. "I wish they’d stop asking how many deals are you signing this week," he remarked during a May 6th meeting with the prime minister of Canada.
The president stated that he would consider potential trade deals within the next two weeks. However, his comments also suggested that some deals may not materialize. "Everyone says: When, when, when are you going to sign deals?" Trump said. "We don’t have to sign deals. We could sign 25 deals right now… if we wanted. We don’t have to sign deals. They have to sign deals with us. They want a piece of our market."
After Bessent’s statement on May 6th that the United States was not negotiating with China, the two sides appeared to make a breakthrough.
Bessent and U.S. Trade Representative Jamieson Greer traveled to Switzerland to meet with China’s "lead representative on economic matters." Trump expressed his expectation that the discussions with Chinese leaders would be "very substantive."
Trump escalated his trade war with China at the same time he paused reciprocal tariffs on every other nation. The standoff threatens to dramatically disrupt trade between the world’s two largest economies and harm both economies.
The meeting in Switzerland could mark the initial step towards de-escalating the trade battle, and Trump stated on May 8th that the tariffs on China will come down. "You can’t get any higher, it’s at 145, so we know it’s coming down," he said.
However, the president also suggested in an interview that aired on May 4th that Americans could simply purchase fewer goods amidst the tariff dispute and anticipated consumer price increases, citing children’s toys as an example. "I don’t think that a beautiful baby girl needs – that’s 11 years old – needs to have 30 dolls," Trump said. "I think they can have three dolls or four dolls because what we were doing with China was just unbelievable. We had a trade deficit of hundreds of billions of dollars with China."
Trump stated during the announcement of the 90-day reciprocal tariff pause that over 75 countries contacted U.S. officials "to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non-Monetary Tariffs."
Trump trade advisor Peter Navarro stated on after the pause, "We’ve got 90 deals in 90 days possibly pending here."
On April 15th, White House Press Secretary Karoline Leavitt stated that the administration had 15 trade deals on paper. Leavitt increased that number to 18 on April 22nd, adding that over 100 countries had contacted the U.S. to discuss trade negotiations.
"I spoke to our entire trade team this morning. There is a lot of progress being made. We now have 18 proposals on paper that have been brought to the trade team," Leavitt said, noting that Trump’s trade team was meeting with 34 countries that week.
Leavitt added, "We are moving at Trump speed to ensure these deals are made on behalf of the American worker and the American people."
These comments raised expectations that deals would begin to be finalized.
Negotiating comprehensive trade deals can be a lengthy and complex process, and some experts have questioned Trump’s short timeline for completing so many deals.
Trump criticized the North American Free Trade Agreement between the United States, Canada, and Mexico when he first ran for president in 2016 and pushed to renegotiate it after he won. That process began on May 18, 2017, when Trump’s trade representative formally notified Congress of the administration’s intent to renegotiate the deal.
Leaders of the three nations signed the new U.S.-Mexico-Canada Agreement (USMCA) in November 2018, more than a year later, and it did not take effect until 2020, after being approved by lawmakers in each nation.
