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Trump threatens new tariffs, moves deadline again. Will deals get done?

It鈥檚 by now a well-known part of President Donald Trump鈥檚 deal playbook: Set an arbitrary deadline and intimidate those who don鈥檛 meet it. But this week, he may be testing the limits of that strategy.

As his Wednesday deadline was approaching for nations to make trade deals with the United States, the president first issued new threats to those dragging their feet, and then extended the deadline. Again.

On Monday, President Trump announced a new 25% tariff on goods entering the U.S. from Japan and South Korea and other rates for a dozen other nations. The new rates and a new deadline of Aug. 1, included in letters posted on his Truth Social account, launch what is expected to be a wave of missives to trading partners outlining new levies on goods that they hope to sell in the U.S.

The move puts pressure directly on those nations 鈥� and implicitly on others 鈥� to keep negotiating for better terms.

The risk for President Trump is that, having heard his bark, world leaders may be losing fear of his bite and ignore the deadline. The risk for those leaders is that they may be underestimating his determination to make the U.S. less reliant on trade, even if it damages the American economy in the process.

For Mr. Trump, 鈥淚t鈥檚 a narrative of victimization: The U.S. has been taken advantage of for decades by evil foreigners stealing our jobs, undermining our economy, and compromising our security,鈥� says , senior adviser at the Center for Strategic and International Studies. 鈥淎nd he鈥檚 going to fix it. ... It really is a question of deeply held belief and principle with him.鈥�

His solution is tariffs, a tax on foreign goods coming into the U.S. In recent weeks, the president has ratcheted up his threats, singling out specific trading partners, including Canada, Japan, the European Union, and, most recently, the BRICS, a group of trading nations that includes Brazil and India. On Sunday, he that he would impose an extra 10% tariff on any nation adopting the 鈥渁nti-American policies鈥� of the BRICS. 鈥淭here will be no exceptions.鈥�

The latest threats to Japan and South Korea came in the form of letters Mr. Trump sent to more than a dozen nations, delineating the tariffs to be imposed if they don鈥檛 reach a deal with the U.S. By setting tight deadlines and threatening countries with the consequences of not meeting them, the president hopes to gain an edge in bargaining.

Car salesman or diplomat?

鈥淚t is a recognizable form of negotiation,鈥� says Michael Morris, a Columbia Business School professor and author of a new book, 鈥淭ribal: How the Cultural Instincts That Divide Us Can Help Bring Us Together.鈥� But 鈥淚t鈥檚 more associated with the negotiation techniques of a car salesman or a condo salesman than a diplomat.鈥�

So far, it鈥檚 not clear how well these tactics have worked. In April, the Trump administration announced that it would complete 鈥�90 deals in 90 days.鈥� Of the three trade agreements that Mr. Trump has announced so far, only in the deal with the United Kingdom has the actual text been made public. Much of what Americans know about the China and Vietnam deals is what the administration has said about them.

And these deals aren鈥檛 agreements in any traditional sense, trade experts point out. They鈥檙e more frameworks for what the parties will talk about than comprehensive agreements spelling out the terms of trade. Even the deal with the U.K. contained far more language about what disputes the nations would try to solve than precise terms of trade between the two, experts say.

鈥淚 don鈥檛 think they鈥檙e that meaningful, and I think markets will understand,鈥� says Ryan Chahrour, a professor of economics at Cornell University. 鈥淭hey know that this is not the final word.鈥�

Zigzags, 鈥淭ACO trades,鈥� and the search for new partners

Mr. Trump鈥檚 zigzag course on tariffs may have hurt his credibility and could diminish U.S. trade prospects. After he announced sweeping tariffs in April on what he called 鈥淟iberation Day,鈥� financial markets plunged. Over four days, the S&P 500 dropped by 12%. Mr. Trump backed down, pausing the threatened tariffs for most nations for three months. Soon after, editorialists and Wall Street traders, frustrated by the president鈥檚 on-again, off-again tariff threats, began to refer to the 鈥淭ACO trade,鈥� an acronym for 鈥淭rump always chickens out鈥� when his policies look like they will hurt the economy.

In the wake of the president鈥檚 moves, other nations have begun to look beyond the U.S. market to sell their goods. In May, the U.K. and India that lowers tariffs on each other鈥檚 imported goods. A South American trade group called Mercosur last week with Norway, Iceland, Switzerland, and Liechtenstein. The chief executive of the European Union is pushing to team up with the trade bloc of mostly Pacific nations called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.

Other nations 鈥渉aven鈥檛 just been sitting around and just considering the U.S. their only option,鈥� says Peter Kim, a professor of management and organization at the University of Southern California鈥檚 business school. 鈥淐hina has been reaching out to them, and they鈥檝e been reaching out to one another. So there鈥檚 a lot of backroom conversation going on.鈥�

A matter of credibility

Such deals give nations alternatives to trade with the U.S. and, thus, leverage when bargaining with it, says Professor Kim.

How much leverage depends on how dependent they are on the American market. For many nations, the alternative commerce will not make up for the trade with the world鈥檚 largest economy. Even if it does, they may need certain advanced American goods, such as cutting-edge chips and artificial intelligence software. So they鈥檙e unlikely to cut off talks with the U.S., trade experts say. In his letters, the president is also trying to discourage nations from imposing countertariffs on U.S. goods.

鈥淚f for any reason you decide to raise your Tariffs, then, whatever number you choose to raise them by, will be added onto the 25% that we charge,鈥� he wrote to South Korea 鈥� and similarly to the others.

Of course, the U.S. has needs of its own, such as access to strategic rare-earth metals, which means Mr. Trump is unlikely to shut down negotiations with nations that supply those metals. That offers nations like China some leverage.

Economists say the uncertainty generated by the tariff threats is slowing the U.S. economy. On Monday, the S&P 500 fell by almost 1%. Despite these risks, the president may feel a need to reestablish the credibility of his threats in trade negotiations by actually imposing the tariffs.

鈥淭rump was really, really annoyed by the TACO thing,鈥� says Mr. Reinsch of the Center for Strategic and International Studies. 鈥淎nd I think he has to prove that that鈥檚 wrong.鈥�