Beginning 4 July, Washington will start mailing tariff “bill letters” to trading partners, specifying country-specific rates that will take effect on 1 August. President Trump bluntly declared that if negotiations stall, “we’ll just charge directly,” with rates soaring as high as 70 percent and falling no lower than 10 percent. With fewer than seven days left in the 90-day grace period, global supply chains and financial markets are reshuffling under mounting pressure.

Skipping Lengthy Talks, New Tariffs Will Take Full Effect on 1 August

Trump confirmed that, starting 4 July, the United States will post tariff-rate letters to roughly ten countries per day and aims for full coverage by 9 July. Negotiating individually with more than 170 economies is “too complicated,” he said, so most nations will simply be told they fall within a 10 percent–30 percent band. Treasury Secretary Bessent added that around one hundred countries will lock in a 10 percent “reciprocal tariff,” while the rest, due to trade deficits or industry sensitivity, will face higher tiers.

Under the “Liberation Day Tariffs” executive order signed on 2 April, the United States temporarily cut its 10 percent–50 percent reciprocal tariff to 10 percent and granted partners a 90-day negotiation window. If no deal is reached by 9 July, the original rates will be restored and raised from 1 August. Country-specific rates will be set according to trade imbalances and market-access conditions and could range from 10 percent to 70 percent. Investment-bank estimates show that if the top bracket is fully applied, more than US$1.3 trillion of imports will be affected and the average global tariff burden could climb back to 1930s levels.

China's Response: Preparing for Battle, Core Focus on High-Tech and Rare Earths
As one of the United States' largest trading partners, China's Ministry of Commerce issued a statement on July 4, reiterating its opposition to unilateralism and trade bullying, emphasizing that "tariff threats do not help resolve the issues but only undermine the stability of global supply chains." The statement noted that China is fully prepared to safeguard its legitimate rights and interests, urging the U.S. to return to negotiations based on "mutual respect and equal benefit" before the July 9 deadline. The key points of the ongoing game are focused on tariff rates for high-tech products (such as semiconductors and AI-related technologies) and critical minerals like rare earths. The market is closely watching the potential tariffs the U.S. may impose on China, with expectations generally pointing to higher levels (30% or more). Additionally, there are signs that some Chinese manufacturers heavily reliant on exports to the U.S. are accelerating their "China+1" strategy, shifting some of their production capacity to Southeast Asia to avoid potential high tariffs. Recent fluctuations in the Chinese yuan reflect growing concerns in the market about the escalation of bilateral trade tensions.

Reactions of Major Trading Partners: EU and Vietnam Move First While India and Japan Stall

European Commission President Ursula von der Leyen said on 3 July that “the goal is to reach a principled agreement by 9 July.” Brussels is willing to accept a two-step rate (20 percent dropping to 10 percent) but insists on exemptions for cars, semiconductors and other sectors. The Commission has approved a US$21 billion retaliation list to be activated on 14 July if talks collapse.

On 2 July, Vietnam signed reciprocal terms with Washington: a uniform 20 percent tariff on Vietnamese goods entering the United States—well below the threatened 46 percent—plus a 40 percent surcharge on “third-country re-exports.” In exchange, U.S. products will enter Vietnam duty-free and Hanoi will expand purchases of energy and chip-making equipment. The news sent Vietnamese export shares and the dong higher.

India, facing a 26 percent tariff threat, has held back-to-back night-time sessions this week but remains deadlocked over farm goods and the digital tax; Reuters cited negotiators saying that “without a breakthrough, the tariffs are likely to take effect as announced.” Japan must contend with a 24 percent baseline and an additional 30 percent–35 percent automotive export quota penalty threatened by Trump. Tokyo has warned that if heavy tariffs are imposed, it may retaliate against U.S. aircraft and agricultural products.

Market Reaction: Supply Chains Accelerate Shifts, Risk Appetite Cools

On the eve of the letters’ dispatch, several Asian contract manufacturers rushed to relocate tariff-sensitive orders to Mexico and the U.S. mainland, driving up local industrial-property rents; European automakers accelerated moves to turn production lines in Alabama, USA, and Monterrey, Mexico, into export hubs for the American market. Global capital markets have grown increasingly cautious: Asia-Pacific equity indices were broadly weaker on 4 July, U.S. Treasury yields rose, gold reclaimed US$3,330 per ounce, and the dollar index hovered near a three-month high—signs that investors are actively seeking safe-haven and hedging opportunities.