The "Liberation Day" proclaimed by Donald Trump on April 2 is turning into Groundhog Day. His trade policy, which was supposed to impose prohibitive tariffs on countries unwilling to sign deals favorable to the United States, has struggled to reach a resolution, keeping the global economy shrouded in uncertainty.
His bombastic announcements in the spring sparked a bout of panic on the bond market, forcing him to grant his trading partners a 90-day grace period. When the ultimatum expired on Wednesday, July 9, the US administration, having failed to secure as many bilateral agreements as it had hoped, decided to set a new date of August 1, accompanied by threats of additional tariffs on some 20 countries as well as on copper, pharmaceuticals and semiconductors.
Although repeated postponements and shifting terms have undermined the credibility of Trump's strategy, these vacillations have not surprised many observers. The US administration has appeared divided on how to proceed, running up against the complexity of a process it had underestimated. After promising that the president would secure "90 deals in 90 days," only three agreements have been signed at this stage: with the United Kingdom, Vietnam and China.
While traditional trade agreements typically run to hundreds of pages and take years to negotiate, Trump settled for a document just a few pages long with the UK, full of promises yet to be fulfilled. With Vietnam, no text has been published and the details of the deal have not been released. As for China, it was Xi Jinping who turned the balance of power in his favor by forcing his counterpart to back down in order to reach a very fragile truce.
The European Union may be close to finalizing an agreement, but negotiators have struggled to secure immediate tariff relief and a commitment not to introduce new measures. What guarantees does Trump offer that in three or nine months' time he will not double down under some pretext or demand further concessions? This is the crux of the problem with his approach: By blowing up the framework of multilateralism and international law and replacing it with strong-arm tactics, the word of the US has lost its value.
"The deals are mostly my deal to them [the signatory countries]," admitted Trump, who brandishes tariffs according to his moods and obsessions, with little regard for economic rationale. He has even considered imposing 50% tariffs on Brazil, accusing it of charging his political ally, former president Jair Bolsonaro, with attempting a coup d'état.
International trade has been plunged into a worrying maelstrom. In the midst of a fresh bout of confusion, the US administration has been trying to project strength while avoiding another financial panic. But as increasingly chaotic announcements pile up and deadlines are pushed further out, the risk is merely postponed. The day these threats are actually carried out, the market's reaction could be as violent as it was in April. For now, the stock market is betting that "Trump always chickens out." But for how long?
Translation of an original article published in French on lemonde.fr; the publisher may only be liable for the French version.