The Trump administration is set to send an ultimatum to its trade negotiation partners to present their "best offers" by the 4th, Reuters reported on the 2nd.
According to a draft letter obtained by Reuters from the Office of the United States Trade Representative (USTR), the Trump administration requested that negotiating countries present sector-specific proposals on U.S. product tariffs, quotas, and non-tariff barriers. It is also reported that there was a request to include specific commitments regarding digital trade and economic security.
The draft indicates that the Trump administration plans to present a "scope of possible agreement" after evaluating responses in a few days. This may include reciprocal tariff rates to be imposed on the respective countries.
The countries receiving the letter are not clearly defined, but the European Union, Japan, Vietnam, and India are among the likely candidates. It appears to be an effort to accelerate negotiations ahead of the July 8 deadline for the reciprocal tariff exemption.
A USTR official said, "Productive negotiations are proceeding rapidly with several key trading partners," adding that "progress checks and evaluations of the next steps are in the interest of all parties."
However, since a court ruling on the 29th of last month, the Trump administration's negotiation card has weakened. The U.S. District Court for the District of Columbia ruled that Trump could not impose tariffs under the International Emergency Economic Powers Act (IEEPA).
Additionally, the U.S. Court of International Trade also ruled that reciprocal tariffs exceed presidential authority. The court stated, "Congress has exclusive authority to regulate trade, and the President's emergency powers cannot overturn that."
The Trump administration has currently filed an immediate appeal. The appellate court has temporarily suspended the effect of the lower court ruling. The final decision is expected to be made by the Supreme Court.
Despite the legal constraints, the Trump administration is utilizing tariffs as a pressure tactic. However, with the weakened negotiating leverage due to the court ruling, it remains uncertain how much each country will concede.
Trade experts analyzed that "Trump's unilateral tariff policy may lose negotiating momentum as it faces legal limitations."