CNN
—
President Donald Trump, the dealmaker-in-chief, has said for weeks that at least one trade deal is imminent with one of the dozens of countries in active negotiations with the United States to avoid punishing tariffs. So where is it?
On Sunday aboard Air Force One, Trump said there “could very well be” trade deals announced this week. He also said that last week. And the week before.
At the same time, Trump continued to temper expectations, saying foreign countries — both friends and foes — have been “ripping off” the United States for years, and trade agreements would come only when he agrees to terms that will benefit Americans. The ball is in his court, not theirs, Trump argues.
“We’re negotiating with many countries but at the end of this I’ll set my own deals because I set the deal, they don’t set the deal, I set the deal,” he told reporters Sunday. “This is not like a big deal that’s gonna be signed — in some cases we’ll sign them, but we don’t have to sign them. I’ll be setting the deal, I’ll be setting the tariff.”
The promise of a potential deal — the administration has said India, Japan and South Korea are the most likely countries to reach a US trade agreement first — has restored confidence in US financial markets and boosted some hopes that the world may avoid the worst-case scenario fallout from the trade war.
But as the weeks roll on with no deal in sight, the Trump administration risks inflicting serious economic damage that could quickly turn into a US and global recession. America’s aggressive trade war has already sent the US economy into reverse. Last week’s quarterly report on gross domestic product, the broadest measure of the US economy, showed America’s first contraction since early 2022, as an otherwise-healthy economy was dragged down by companies stockpiling goods to get ahead of tariffs.
And that was the first quarter — before the most aggressive trade policy had taken effect.
The slow-as-molasses pace of striking any kind of compromise on trade doesn’t bode well for the ultimate prize: a détente with China. With tariffs of at least 145% on Chinese imports, and a 125% retaliatory tariff by China on US goods, trade has all but stopped with one of America’s most important economic partners.
That means America is just days away from pandemic-like supply chain disruptions that could lead to higher prices and empty store shelves.
No trade deal in sight
Trump said in a Time interview last month he had made 200 trade deals already, later clarifying that they’ll be done soon. Administration officials have said they’re in advanced trade negotiations with more than a dozen countries.
Despite the administration’s rhetoric that it is in advanced trade negotiations with more than a dozen countries, actual trade deals take significant time — often years — to hash out. They typically involve incredibly complex agreements, delving into the minutiae of various goods and non-tariff barriers. They often involve significant political considerations, as various parties seek to protect voters with special interests.
Instead, any “deal” the Trump administration inks — whenever that happens — is almost certainly more like a memorandum of understanding. That may result in lower tariffs on one particular country’s goods in the near term, but they’ll probably do little that amounts to a substantial economic win for quite some time.
That’s because Trump set a tight deadline to get this all done: The “reciprocal” tariffs that went into effect April 7 and were paused for 90 days on April 9 affect dozens of countries. So the clock runs out on July 8 — when punishing tariffs as high as 50% on dozens of nations are set to go back into effect.
“The 90-day tariff pause, which is now roughly 25% over, provides little time for the typical back-and-forth trade discussions that require months if not years to craft a trade deal,” said Jacob Jensen, trade policy analyst at the American Action Forum, a center-right policy institute. “There is a significant difference if these deals are official, written trade agreements rather than verbal commitments to buy more US products, as one has long-term economic implications and the other can be ignored down the line.”
Trump has said he would not extend the tariffs a second time — and, in fact, may act sooner to reinstate some tariffs on countries with whom his administration cannot reach an agreement, perhaps in a matter of a couple weeks.
“It will be difficult for the US trade representative to negotiate potentially 100 separate trade agreements within 90 days, meaning President Trump must soon determine whether tariffs will be reinstated or delayed further,” Jensen said.
And even if deals are ultimately completed with all countries, there’s no guarantee Trump would keep them. For example, Trump, in his first term, was instrumental in negotiating the USMCA free trade agreement with Canada and Mexico, only to abandon it in his second term, charging an on-again, off-again 25% tariff on some Mexican and Canadian goods. And by placing significant tariffs on virtually all goods coming into the United States, Trump also blew up a number of existing trade deals with allies.
China is the real problem
Regardless of how many trading partners the United States reaches deals with, the one that really matters is China. And that appears to be going nowhere fast.
The historically high tariff on China has effectively stopped all trade between the two countries, Trump has said repeatedly. The number of cargo ships headed from China to the United States fell 60% in April, according to Flexport, a logistics and freight forwarding broker. JPMorgan estimates Chinese imports into the United States will plunge by as much as 80% by the second half of the year.
American consumers should expect pandemic-like disruptions as goods that were warehoused before tariffs took effect begin to run out over the next week or so, including higher prices, shortages and empty store shelves.
Treasury Secretary Scott Bessent has said repeatedly that the high tariff on China is “unsustainable,” and Trump also said he expects the tariff to come down. But it would need to come down significantly — by more than half — for any real trade to recommence, trade experts say. But even then, the economic damage would be done — and it would be weeks or even months before American shelves would be replenished.
Despite the increasingly dire warnings and economic turmoil, the two countries seem not to be remotely close to a deal. China has repeatedly denied Trump’s statements that they’re in talks, and both sides have dug in, saying they’ll need major concessions at the outset to begin negotiations. Bessent said it could take two to three years for trade to normalize with China.
Some signs point to cracks forming in the wall between the countries, however. China said last week it is “currently assessing” proposals by the United States to begin trade talks, in a subtle tone shift that could open the door for negotiations. And Trump last week reiterated that tariffs on Chinese imports to the United States will eventually be lowered.
“At some point, I’m going to lower them because otherwise you could never do business with them,” he said in an interview with NBC’s “Meet the Press with Kristen Welker,” which taped on Friday. “They want to do business very much … their economy is collapsing.”
CNN’s Alayna Treene contributed to this report.