CNN
—
Despite unprecedented immigration raids, a massive domestic policy agenda and now the prospect of actual war, President Donald Trump’s first five months in office have nevertheless been dominated by his trade war. He notched some recent wins, but Trump is rapidly running out of time to seal the deal.
Or, more accurately, deals. More than 100 of them.
After pausing his “Liberation Day” tariffs that sent levies surging for dozens of countries’ exports to the United States, Trump has sought to make a number of bilateral trade deals that would open American businesses’ access to foreign markets and boost US manufacturing. The deadline is July 9. Trump has just two deals to show for his efforts over the past two months.
Trump and other world leaders had hoped to use the G7 meeting in Canada this week to hammer out more. The announcement of new deals could have solidified confidence that the US and global economies could avoid a recession this year – a major question mark that most economists believed was a distinct possibility just a few weeks ago.
The degree to which Trump – his preferences and, more importantly, his aversions – shaped the structure, logistics, schedule and deliverables planned for the summit underscored the shared view of Trump’s singular importance in this moment.
It was Trump’s time that was most coveted, and the subject of intense efforts in the weeks before to secure bilateral sit-downs or pull-aside chats on the sidelines of the official events, US and foreign officials said.
But then Trump left the G7 early on Monday to deal with the escalating Israel-Iran conflict. He left behind his economic team, but Trump’s early and unexpected departure removed the key piece from a complex trade puzzle.
Now Trump has four weeks left to score those deals, set the clock forward again or announce higher tariff rates – all while he’s increasingly occupied with a military conflict in the Middle East that could quickly become a wider war with direct US involvement.
Trump and his economic team have long promised deals that have been “coming soon” for weeks. So far, only the United Kingdom and China have agreed to frameworks for US trade negotiations. The UK signed its agreement at the G7 this week. And China met US trade representatives in the United Kingdom last week and agreed to the terms of a previous arrangement after tensions escalated in recent weeks.
But Commerce Secretary Howard Lutnick once again promised last week that new trade deals are right around the corner.
“There are so many coming,” Lutnick told CNBC last Wednesday. “You’re going to see deal after deal, they’re going to start coming next week and the week after and the week after. We’ve got them in the hopper.”
Those predictions have been wrong. Every time.
Treasury Secretary Scott Bessent has repeatedly said the administration is in active negotiations with 18 trading partners after reaching those tentative agreements with the UK and China.
So where are the deals? Lutnick said last week Trump is in no rush, preferring to hammer out better agreements that benefit American businesses and consumers.
“Good shape isn’t good enough for the United States of America. We want great deals that are fundamental for America,” Lutnick said. “We can get them done. We need to open these other countries’ markets. Our farmers, our ranchers, our fisherman, they are going to have just a great time. Our machinists are going to sell a lot of equipment overseas.”
The key factor, Lutnick said, is opening up foreign markets that impose tariffs and other non-tariff trade barriers such as taxes and export controls that limit American companies’ access to those countries.
At the G7, the US and Canada agreed to a 30-day timeline for a bilateral agreement, but a Canadian proposal privately broached with Trump that exchanged defense spending increases for a reprieve from Trump’s steel and aluminum tariffs didn’t appear to gain any traction, two officials said.
A pull aside between Trump and Japanese Prime Minister Shigeru Ishiba didn’t yield the agreement that Japanese officials had hoped for weeks could be finalized at the summit.
Meanwhile, Trump left behind in Canada a number of world leaders with frayed nerves but no new trade deals at the clock ticks down to zero.
“They’re either going to make a good deal or they’ll just pay whatever we say they have to pay,” Trump told reporters aboard Air Force One when asked about progress in negotiations with the European Union during the trip back to Washington.
Moments later, Trump was asked about the status of talks with Japan.
“The Japanese are tough,” Trump said a few minutes later when asked about negotiations with Japan. “But ultimately you have to understand we’re just going to send a letter saying ‘this is what you’re going to pay, otherwise you don’t have to do business with us.’”
Federal Reserve Chair Jerome Powell on Wednesday said tariffs have already raised prices on some goods – especially electronics – and inflation could spike in the coming months as higher import taxes make their way through the system.
“So we’re beginning to see some effects. We expect to see more,” Powell said during his post-meeting press conference. “We’ve had goods inflation just moving up a bit, and, of course, we do expect to see more of that over the course of the summer.”
Powell noted that many goods being sold at retailers today may have been imported months ago, before tariffs were imposed. So it could take time before inflation takes hold.
“Many, many companies do expect to put all or some of the effect of tariffs through to the next person in the chain, and, ultimately, to the consumer,” Powell said.
Fed members in their quarterly economic forecasts on Wednesday predicted inflation would rise higher over the next couple years than they had expected in March. They also said the economy would grow more slowly and unemployment would rise more quickly than they previously believed.
Powell noted that the reduction in tariffs on Chinese goods to 30% from 145% was a relief. But the big question for the economy remains: Will tariffs move higher in the summer after the 90-day “reciprocal” tariff pause expires for so many other countries.
“The effects of tariffs will depend on their ultimate level,” Powell said. “Expectations of the level and economic effects reached a peak in April and have since declined. Even so, increases in tariffs this year are likely to push up prices and weigh on economic activity.”
While Powell took a soothing approach on Wednesday, the urgent deadline is viewed around the world as an acute threat to domestic economies and industries if agreements aren’t reached.
For Trump, it’s leverage.
After all, Trump told reporters aboard Air Force One, “we’re making a lot of money.”
