Ninety Days for Zero Deals, & Zero Certainty for the Future
Trump’s chaos-monkey trade policy looked at once again. No “art of the deal'“, but only a cascade of threats, double-crosses, and boasts; thus uncertainty reigns supreme and, behind, the bravado...
Trump’s chaos-monkey trade policy looked at once again. No “art of the deal'“, but only a cascade of threats, double-crosses, and boasts; thus uncertainty reigns supreme and, behind, the bravado, America’s trading partners see how appeasement offers no protection from policy whiplash…
Chaos-monkey Trump vowed 90 trade deals in 90 days; the world got a handful of vague frameworks and a blizzard of threats. As deadlines shift and details evaporate, economic actors are left to navigate a landscape defined by uncertainty. America’s partners must choose: flatter, fight, or flee. The only real constant? The random walk of economic policy in the age of the chaos monkey:
Paul Krugman: The Tariff Beatings Will Continue Until Morale Improves <https://paulkrugman.substack.com/p/the-tariff-beatings-will-continue>: ‘Investors… deluded themselves into believing that Trump was done disrupting world trade…. By now we were supposed to have scores of trade deals signed. Instead, yesterday Trump began posting letters on Truth Social (diplomacy!) telling a variety of countries that they would face high tariffs on Aug. 1… [that] look very close to the widely ridiculed… tariffs announced on April 2….
These tariffs are really, really high…. In the long run 25 percent tariffs will reduce trans-Pacific trade by almost 60 percent…. There were never going to be genuine trade deals…. Why didn’t Korean and Japanese negotiators make big enough concessions to satisfy Trump? Because there was nothing for them to concede…. Neither country… [coffer big tariff reductions, because their tariffs were already minimal…. How were the South Koreans supposed to end unfair trade practices that exist only in Trump’s imagination?… Why make a deal with a man who will surely break it?... His letter to the South Koreans doesn’t even mention KORUS, let alone explain why the United States is reneging on its solemn promises…
I mean, what can you say by this point? We have said this before. But I guess we need to say this all again:
During Trump 1, Mexico and Canada played ball with Trump by “renegotiating” NAFTA—resulting in the so-called United States-Mexico-Canada Agreement (USMCA). This was not, as Trump and his acolytes claimed, a wholesale replacement of NAFTA, a huge deal, the transformation of thew worst deal in American history into the best. It was, rather, an incredibly modest update. More than half of the even slightly significant differences came in minor changes to the auto parts provisions:
NAFTA: Required 62.5% of a vehicle’s parts to be made in North America for tariff-free status.
USMCA: Raised this to 75%.
USMCA: 40-45% of auto content must be made by workers earning at least $16/hour.
But Mexico and Canada allowed Trump to trumpet, without contradiction, that he had imposed an agreement on them that was massively more favorable to the U.S. and massively less favorable to them than NAFTA had been. The underlying logic was that that was just smoke and mirrors, and by pretending that they had bent the knee they had done Trump a favor, and so secured a stable relationship with him.
Nope.
Playing along with Trump got them nothing but a belief on Trump’s part that they were easy prey who could be bullied. Trump has continued to threaten tariffs on Canadian aluminum and steel. Mexico has found itself repeatedly in the crosshairs over migration and agricultural issues. It is not a transactional, sector-by-sector, deal-by-deal approach. It is random demands.
That pattern rules.
And so, at present, countries are casting about for strategies to manage the volatility emanating from Washington:
Some are attempting tto appease Trump with ostentatious displays of respect and deference—think of the carefully choreographed summits, the flattery-laden communiqués, and the willingness to grant symbolic victories in hopes of staving off substantive costs.
Others are experimenting with a more confrontational stance, threatening countermeasures or leveraging their own economic and political assets to force a reconsideration of U.S. demands. Consider the European Union’s readiness to threaten retaliatory tariffs or China’s calibrated responses to U.S. actions.
And all countries, prudently, are seeking to “derisk” their economic futures by diversifying supply chains, forging new alliances, and reducing their dependence on the American market. The rise of regional trade agreements in Asia and Europe, and the acceleration of “friendshoring” and “nearshoring” strategies, are all part of this broader effort to inoculate national economies against the caprice of U.S. policy.
In sum, the global trading system is being reshaped not by the logic of comparative advantage or the invisible hand, but by the need to get out of the way of the random actions of feces-flinging chaos monkey.
Coming from the Trump side, the Bessent affinity, right now we see an attempt to project confidence, with claims that the threats of tariffs are being used as leverage, and that the door is open for deals and deadline extensions beyond August 1. Bessent claims that things are “mov[ing]… along”.
But cast your mind back to April 12. “We’re going to make 90 deals in 90 days” said Peter Navarro. 90 days after April 12 would be July 10: Thursday. How many deals have been struck?
By my count, zero. Trump’s people claim that Trump has reached three “deals”: with the U.K., China, and Vietnam. But what are these deals, anyway?
For the UK:
The UK promises to reduce or eliminate “numerous non-tariff barriers”, which are not specified.
The UK promises to reduce or eliminate non-tariff barriers on U.S. agricultural exports, especially beef and ethanol, insofar as those are consistent with its health and safety regulatory régime.
The US promises to waive the 25% tariff on UK steel and aluminum, but when and how depends on future negotiations and on UK compliance with US national-security supply-chain requirements.
The US and UK commit to negotiating preferential treatment for UK-produced pharmaceuticals, details not specified.
There are two actual provisions:
The U.S. will allow up to 100,000 UK-made cars per year—more than its 2024 exports—to enter at a combined 10% tariff (7.5% “Liberation Day” tariff plus the standard 2.5% MFN rate), and UK auto parts for use in UK vehicles also get the 10% rate.
The US exempted some specified UK aerospace products (e.g. Rolls-Royce engines) from new tariffs it was imposing.
Those are the only actual “deals”. There is, literally, nothing more there. The rest of the deal is literally nothing but a mutual promise to make a deal, without any fallbacks or triggers to provide any incentives to do so
That is typical. And now the Bessent affinity is saying that they are hoping to “sign” perhaps ten such non-deal deals by September 1. Hoping.
The real outcome is a climate of uncertainty that discourages investment and undermines confidence in the durability of international commitments. In this brave new world, policy risk—not comparative advantage—has become the prime mover of global commerce.
At least we are going to get an experiment in how much damage grave policy uncertainty can do to an economy, and how quickly.
References:
Buchwald, Elizabeth. “Trump’s ‘reciprocal’ tariff pause is about to expire. Cue the confusion”. CNN, July 6. <https://www.cnn.com/2025/07/06/economy/reciprocal-tariff-pause-expires>.
Economic Policy Institute. 2025. “U.S. and U.K. Release Trade Deal Terms.” EPI Policy Watch, June 18. <https://www.epi.org/policywatch/u-s-and-u-k-release-trade-deal-terms/>.
Jeyaretnam, Miranda. 2025. Trump’s Trade Deals, Negotiations, and New Tariffs for Each Country.” TIME, July 7. <https://time.com/7300389/trump-trade-deals-tariff-letters-deadline/>.
Krugman, Paul. 2025. “The Tariff Beatings Will Continue Until Morale Improves”. July 8. <https://paulkrugman.substack.com/p/the-tariff-beatings-will-continue>.
There is some interesting analysis of European foreign policy here by Minna Ålander: https://phillipspobrien.substack.com/p/buying-time-europes-trump-dilemma
She argues that the "ostentatious displays of respect and deference" are not really attempts to appease but rather, to pretend and extend:
"Essentially, what Europeans need is time. [...] To quote a European defence industry representative, when asked what the US-provided capabilities are that Europe cannot replace, “there is nothing we cannot do, some things just take more time and cost more money”. Europeans have now committed to spending the money, what they need is more time.
That means, then, that the priority for Europe is to manage Trump in a way that enables an orderly burden shifting and postpones full American disengagement from Europe as far into the future as possible."
I thought is had been pointed out before that Trump's trade deals are not official, and would need to be ratified by Congress. This article on Govtrack.us indicates that what Trump is doing is illegal. So why isn't this being seriously litigated? https://www.govtrack.us/posts/519/2025-07-07_trumps-tariffs-are-unlawful-how-the-nondelegation-doctrine-limits-congress
Also, Trump reinstated trade talks with Canada after Canada withdrew its digital services tax. Britain was due to make the same digital services tax on major US platform companies. Has this been quietly dropped, or is it leverage for Trump to break the "trade deal" with Britain?
If the nations and trading blocs of the world were steadfast and hit back hard on these so-called tariff threats, with the result that goods, including grocery food items, disappeared from the shelves, wouldn't that precipitate real pushback from the population of the US against their reps in Congress and the administration? The only reason I can see for not doing so is to provide a cushion to redirect trade away from the US...possibly permanently. It will take time.
What the EU and Britain could do now is to insist on only European arms manufacture for defence against Russia. Deprive the US arms manufacturers of their sales, that even now might be suspect (c.f. RAF F35 stranded in India with a difficult to diagnose and fix technical fault. Hardly a selling point for such an expensive warplane). Perhaps it is better to manufacture existing fighters that are cheaper, more repairable, and better for the local economy than importing them. Same for replacing US Trident nuclear missiles in the small British submarine fleet.) Europe, including Britain, needs to take more seriously the unreliability of the US as a NATO partner, and assume the worst, especially if NATO is activated in the case of Russian aggression. If Fiona Hill is correct, Europe and Russia are already as war, but not yet in a conventional hot war, but not a cold war either.