Donald Trump’s ‘Reciprocal’ Tariff Pause Expires July 9 – What Happens Next? Explained

US President Donald Trump’s 90‑day pause on his “reciprocal” tariffs – those levied at rates up to 50% – is set to expire at 12:01 am ET on July 9. 

Countdown to Trump’s Tariff Resurgence

After announcing the levies on April 2, which he termed the “Liberation Day,” markets plunged and the president postponed the increases until July, saying investors “were getting a little bit yippy, a little afraid”, according to a report published by Reuters.

Trump further warned that countries failing to strike deals will face letters detailing tariff rates as high as 70%, effective August 1, CNBC reported. But he also noted the possibility of extending the pause for those “negotiating in good faith,” without detailing who qualifies.

What the Pause on Reciprocal Tariffs Achieved, and Didn’t

Three deals sealed:

According to a Reuters report, the UK, China and Vietnam signed reciprocal arrangements. The Vietnam deal stands out as it caps tariffs at 20%, far below an originally threatened 46%, restoring calm to markets.

Market reaction:

Stock indexes bounced to record highs, bond yields fluctuated, and inflation stayed within manageable levels, as reported by Reuters.

Global impact:

Meanwhile, many nations received tariff reprieves — Japan, Taiwan and ASEAN praised the window for negotiation, per the CNBC report. But economies like Vietnam and others reportedly scrambled, fearing heavy blows ahead.

ALSO READ: Why Musk Cannot Run For US President Despite Launching His ‘America Party’ | Explained

Vietnam Deal: A Model or an Exception?

Trump unveiled the Vietnam deal just before the pause deadline, imposing a 20% tariff and a 40% penalty on “transshipped” goods, in exchange for tariff-free American access to Vietnamese markets, as reported by CNBC. 

According to Reuters, it hit markets, with Nike, Under Armour, Levi’s stocks climbing sharply.

Some see it as a template, with UBS’s Ulrike Hoffmann‑Burchardi calling it a “positive step toward more durable bilateral deals … toward greater clarity for investors”. 

Still, questions linger on rule enforcement and whether other nations can negotiate similar terms.

Major US Trading Partners Still in Limbo

Despite the buzz, negotiations with the key US trading partners like the EU, India, Japan, and Canada are yet to yield concrete results. 

Trump said letters will go to about a dozen countries Monday, setting new rates, Axios reported Saturday. Yet, deadlines for China and Canada push beyond July, the report said.

Trump himself has hinted the pause could stay in place, but only for those who show sincerity. “We could extend it; we could make it shorter,” he had reportedly said, while also warning, “Congratulations, you’re paying 25%.” 

Rates could range “from maybe 60% or 70% tariffs to 10% and 20%,” he added.

Why This Matters

• Markets: Investors watched global stocks rally even as global bond yields shifted and the dollar softened . Reports suggest a tariff surge next month could reverse those gains.
• Inflation & supply chains: Tariffs raise costs; inflation may lag but could spike later .
• Politics: With 2026 midterms approaching, Trump faces pressure to prove economic muscle while avoiding backlash from consumers and businesses .

(With inputs from CNN, Reuters, Axios and CNBC)

ALSO READ: Leaders of Growing BRICS Group Gather for Rio Summit — What’s on the Agenda and What to Expect | Explained