US tariffs to surge? Trump’s 90-day pause to end amid unresolved trade tensions

Dubai: With the end of the Trump administration’s 90-day pause on “reciprocal” tariffs approaching July 9, the outlook for global trade remains deeply uncertain.

Despite anticipation surrounding the date, analysts from S&P Global Market Intelligence warn that uncertainty will likely persist through the remainder of 2025, regardless of the outcome of upcoming negotiations.

US President Donald Trump has repeatedly suggested that higher tariffs are imminent, citing the expiration of the temporary pause. However, experts anticipate a more nuanced outcome.

According to S&P Global, countries will likely be sorted into four categories based on their negotiation status with the US—ranging from those with provisional deals to those facing immediate tariff hikes.

“Reaching a provisional deal doesn’t guarantee lower tariffs,” said John Raines, Head of North America Economics & Country Risk at S&P Global Market Intelligence. “Deals could still result in tariffs higher than the current 10% baseline. Moreover, countries can shift categories over time, depending on how talks evolve.”

Unresolved negotiations

Provisional trade deals have been reached with China, the UK, and Vietnam. However, negotiations with the EU, Japan, and India remain unresolved, complicated by political tensions and ongoing U.S. national security reviews under Section 232.

The US administration has warned that countries failing to secure agreements will receive formal notices of new tariffs—potentially as high as 70%. Trump signed letters to 12 nations outlining these “take it or leave it” tariff offers, which are set to be sent on Monday.

Even countries currently exempt from immediate tariff increases face the ongoing threat of future hikes. Tariffs may be used as short-term leverage, lasting only weeks if shifting market conditions or diplomatic progress prompt the White House to reconsider.

If the US fails to finalize trade deals with certain nations by the July 9 deadline, country-specific tariffs will take effect after midnight, sharply increasing duties on billions of dollars’ worth of imports worldwide. Given the complexity of these negotiations, some experts believe the U.S. may extend the tariff pause for select countries to allow more time for talks.

Volatility to remain norm

The economic impact is already showing in forecasts. S&P projects core US inflation to climb to 3.7% in the second half of 2025, likely keeping the Federal Reserve from cutting interest rates until at least December. That pause, combined with tighter financial conditions, is expected to slow economic growth and push unemployment up to 4.7% by mid-2026.

In a more pessimistic scenario, where tariffs are sharply raised under authorities like the International Emergency Economic Powers Act (IEEPA), the US economy could contract by 0.5% in the second half of this year, with unemployment potentially peaking at 6.1%.

President Trump has described tariffs as a tool to boost domestic manufacturing and shrink trade deficits. However, critics argue the costs ultimately fall on US importers and consumers, especially as average duties could jump from pre-Trump levels of around 3% to nearly 20% under proposed hikes.

Meanwhile, countries worldwide are scrambling to finalize trade frameworks before the deadline. The uncertain policy environment is complicating supply chain planning and investment decisions globally, as markets await the July 9 outcome—and whatever may come after.

While Trump's protectionist strategy may serve domestic political goals, the global ripple effects are only beginning to be felt. And if the past 90 days are any indication, volatility will remain the norm in U.S. trade policy.