Trump to finalise global trade decisions by Aug 1: What his ultimatum means for the world

US President Donald Trump - File Photo (AFP)

With just days to go before a major trade shake-up, US President Donald Trump is preparing to make key decisions on international trade agreements ahead of a self-imposed deadline of August 1. According to US Commerce Secretary Howard Lutnick, time is running out for countries hoping to avoid steep US tariffs.

“We’re going to have things done by Friday,” Lutnick told CNBC in an interview, signalling that the administration is pushing for swift resolutions in ongoing negotiations. “That’s a hard deadline, so on August 1, the new tariff rates will come in… Nothing stops countries from talking to us after August 1, but they’re going to start paying the tariffs on August 1,” he added.

The US is currently holding parallel negotiations with major economies including China and the European Union. Discussions with the EU centre on resolving disputes over steel and aluminium tariffs and creating a clearer framework for regulating digital services -- two sectors that have become flashpoints in the modern trade environment.

Countries that fail to reach an agreement with Washington by the end of July will face immediate consequences. A new tariff regime will go into effect on August 1. Smaller economies in Latin America, Africa, and the Caribbean will be subject to a baseline tariff of 10 per cent. Larger trading partners, however, are being asked to make greater concessions, either by opening their markets further or paying what the US calls “fair tariffs.”

The Trump administration’s aggressive tariff posture is being closely watched by global markets, as the deadline threatens to disrupt global supply chains and escalate trade tensions, particularly with major players like China and India.

A team of negotiators from the US government will visit New Delhi in the second half of August to hold the next round of talks for a trade agreement, a senior government official said on July 26.

The timing of the visit by the American negotiators has dimmed the hopes of a mini deal between Indian and the US, as the pause on the 16 percent tariffs to be imposed on India ends on August 1.

U.S. Treasury Secretary Scott Bessent told CNBC on July 21 that the Trump administration was more concerned with the quality of trade agreements than their timing. Asked if the deadline could be extended for countries in talks, he said it was up to Trump.

The fifth round of talks between the two countries concluded last week in Washington. Both sides are now working towards finalising the first tranche of the agreement by the Fall, by September or October. To be sure, the first tranche is not the same as a mini deal, which India has been hoping to seal as a short-term measure to get relief from the steep tariffs imposed by the US.