TACO or tariffs? Trump's big trade deadline is coming. Here's what to expect

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Standing in the Rose Garden and holding a giant chart, President Donald Trump, who likes to call himself “Tariff Man” showed off the “reciprocal” tariffs he was planning to levy on dozens of countries.

That was April 2, christened “Liberation Day” by Trump.

Almost four months and two extensions later, a new Aug. 1 deadline is looming. A slew of countries will face steep tariffs − including a 50% tariff on imports from Brazil and a 30% tariff on the European Union. A baseline tariff of 10% remains for all countries.

“We'll have a straight, simple tariff of anywhere between 15% and 50%," Trump said during an AI summit in Washington, on July 23. "We have 50 (percent) because we haven't been getting along with those countries too well."

Are new tariffs really coming?

Will there be another extension? Trump has said no. But Treasury Secretary Scott Bessent recently left the door open for a third reprieve.

The first deadline, on April 9, was paused for 90 days − until July 9 − after it caused significant turbulence in the financial markets and economists warned of a potential recession.

"I thought that people were jumping a little bit out of line," Trump said on April 9. “They were getting yippy, you know. They were getting a little bit yippy, a little bit afraid."

Trump’s shifting on the deadlines also gave birth to an acronym: TACO, for Trump Always Chickens Out, mocking his on-again-off-again tariff policies.

A pause – then a tariff storm

On July 7, two days before the new tariffs were to go into effect, Trump extended the deadline to Aug. 1, saying several countries were negotiating deals. Trump also began sending letters on July 7 to countries letting them know of the new, updated tariffs that would be imposed on them.

The first batch of 14 letters to countries including South Africa and Malaysia also made clear that if they retaliated against the United States with their own tariffs, their target tariffs would go even higher. On July 9, he sent tariff letters to another eight countries, including Brazil. So far, the United States has sent 25 tariff letters, White House Press Secretary Karoline Leavitt said on July 23.

What trade deals have been struck so far?

While the U.K. was the first country to reach a trade agreement with the United States, the latest and the most significant deal so far has been with Japan, Washington's fifth-largest trading partner.

Other countries with whom Trump announced deals in recent months include Indonesia, Vietnam and the Philippines.

On July 22, Trump announced a “massive deal” with Japan under which the United States would impose a 15% tariff on Japanese imports. Trump had previously threatened a 24% tariff on Japan.

He said Japan would invest $550 billion in the United States and that the United States would receive 90% of the profits, without offering any details. His announcement also said Japan had agreed to open its market to imports of vehicles, rice and other agricultural products from the United States.

Of the five countries that the United States has struck trade deals with, it only runs a trade surplus with the U.K.

TACO time?

On July 21, in an interview with CNBC, Bessent was noncommittal on whether there could be an extension for countries negotiating in good faith.

“We’ll see what the president wants to do,” Bessent said.

He added that reverting to the steep tariffs that were first proposed after the deadline might force countries to come up favorable terms.

“But again, if we somehow boomerang back ... I would think that a higher tariff level will put more pressure on those countries to come with better agreements,” said Bessent.

Meanwhile Trump has repeatedly said there will be “no change” in the deadline.

“In other words, all money will be due and payable starting AUGUST 1, 2025 − No extensions will be granted,” he wrote on Truth Social on July 8.

What’s happening with tariffs on Canada, Mexico and China?        

Trump threatened a 25% tariff on imports from Mexico and Canada shortly after his election victory.

Ten days after taking office, Trump went after the top three trading partners of the United States with an executive order imposing 25% tariffs on nearly all goods from Canada and Mexico. Trump said it was to force the countries to stem the flow of migrants and fentanyl across the United States border. Meanwhile, China was hit with a 10% tariff.

Canada and Mexico immediately responded with retaliatory tariffs of their own.

Two days later, Trump agreed to a 30-day pause. In March, Trump waived tariffs on goods compliant with the United State-Mexico-Canada Agreement (USMC) and the imposed 25% universal tariffs on steel, aluminum and automotive imports, including those from Mexico and Canada.

Tariffs on steel, aluminum and copper were raised in June to 50% − Canada is the biggest supplier of steel and aluminum to the United States − while the tariffs on automotive imports held steady.

Trump sent a letter to Canadian Prime Minister Mark Carney in July saying he planned to impose 35% tariffs across-the-board on imports from Canada come Aug. 1.

Trump said fentanyl was "hardly the only" challenge United States had with Canada and that its trade barriers and non-tariff polices were causing "unsustainable" trade deficits.

"Canada charges extraordinary Tariffs to our Dairy farmers – up to 400% - and that is even assuming our Dairy Farmers even have access to sell their products to the people of Canada," Trump said in the letter.

In a letter to Mexican President Claudia Sheinbaum, Trump said that the country had helped in “securing the border.” But he said Mexico had “still not stopped the Cartels who are trying to turn all of North America into a Narco-Trafficking Playground.”

After months of tit-for-tat tariffs and trade war with China, which saw the U.S. tariffs spiking to 145% and Chinese tariffs on U.S. goods reaching 125%, the two called a truce in May, agreeing to a 90-day suspension of the levies, set to expire on Aug 12.

On June 11, Trump announced a deal had been “done” subject to “final approval” by both leaders. He said the U.S. tariffs would be set at 55% on imported Chinese goods while China's tariffs remain at 10%.

Bessent, who is scheduled to meet his Chinese counterpart on July 28 in Stockholm, Sweden, indicated the deadline was likely to be moved.

“We’ll be working out what is likely an extension” Bessent told Fox Business on July 22.

Swapna Venugopal Ramaswamy is a White House correspondent for Paste BN. You can follow her on X @SwapnaVenugopal