(Not So Fun) Fact: All U.S. territories (excluding Puerto Rico and the District of Columbia) are subject to certain U.S. tariffs, including the baseline 10-percent “Liberation Day” tariff.

The G7 Summit: The Sideline Trade Talks That Were Sidelined

What’s Happening: This week, the Group of Seven (G7) kicked off its 2025 summit in Canada, with leaders from the world’s largest economies meeting to discuss economic cooperation, trade wars, and ongoing military conflicts. The topic that stole the show was, of course, President Trump’s tariffs, which have targeted all G7 attendees, each of whom is looking to discuss new trade agreements. Some of Trump’s planned sideline conversations were with the United Kingdom (UK), Germany, Canada, Mexico, and European Union (EU) officials. Unfortunately, the only notable conversations that took place were with the UK and Canada, as President Trump left the conference early to deal with the escalating situation in the Middle East. Trump officially signed the U.S.-UK trade deal and agreed to begin negotiating with Canada in the next 30 days (the “Liberation Day” tariff pause ends in just 19 days). While there were rumors that the EU might be willing to accept a baseline 10-percent tariff in order to reach a deal with the United States, a spokesperson clarified that this was not the case. Aside from trade, G7 leaders agreed to further collaborate on critical minerals by addressing shortages and onshoring components of the supply chain where possible.

Why It Matters: The lack of any serious trade progress means there is less than one month before nearly all “Liberation Day” tariffs snap back into place – unless the administration reverses course. The UK trade deal signed at the G7 summit, while a nice change of pace from the continuous announcements of new tariffs, provided no new substance since it was declared on May 8 and, besides which, accounts for just 2.1 percent of U.S. imports. The remaining 97.9 percent of U.S. imports will be subject to tariffs ranging from 10–50 percent in under 20 days, representing a more than $300 billion tax hike on U.S. consumers and businesses. The EU’s unwillingness to accept a baseline 10-percent tariff will almost certainly create a sticking point in trade discussions, as Trump recently stated “they’re not offering a fair deal yet.” As a reminder, the EU is facing a potential 50-percent tariff, much higher than the already high 20-percent tariff from “Liberation Day.” As for critical minerals, there does not appear to be any formal commitment to enhancing mining or refining within G7 countries. The informal plan also stresses the importance of ensuring that critical mineral markets reflect the “real costs of responsible extraction” – fluffy language for environmental and labor standards, and not exactly the stuff of progress. Placing disproportionate value on a host of additional regulations, costs, and standards over actually increasing production will ensure that China continues to dominate the global supply of critical minerals.

Looking Ahead: The Trump Administration is stuck between a rock and a hard place. On the one hand, it could extend the July 9 tariff pause deadline, which would provide more time for trade talks but invite criticism for reversing course and signal to trade partners that deadlines are meaningless. On the other hand, the administration could save face and let the tariffs snap back into place, but that would result in the U.S. stock market plummeting once again. The Shipment anticipates a scenario in which the administration attempts to thread the needle as much as possible: Countries that are close to a deal could receive a tariff pause extension while tariffs snap back on other countries that are further from a deal. Alternatively, last-minute deals could be announced on July 9 for dozens of countries following a pre-determined trade deal template. These would likely be very similar to the U.S.-UK agreement, in which certain tariffs remain in place and others are slightly lowered. This gives the Trump trade team a “win” in the headlines but no substantive progress for the real-world economy.

It Was Never About Reciprocity: Lutnick Gives Away the Game

What’s Happening: During Commerce Secretary Howard Lutnick’s June 4 testimony to the Senate Appropriations Committee, the secretary was questioned on tariff reciprocity – specifically, whether the United States would drop tariffs on Vietnam if Vietnam dropped its tariffs first. Lutnick replied, “absolutely not,” and emphasized that Vietnam is “just a pathway from China to [the United States],” which justifies maintaining tariffs on the country. He continued by stating the United States would be willing to lower tariffs if Vietnam were to stop trading with China.

Why It Matters: While Lutnick’s answer was buried by other headlines, it is important. One of the leading individuals in Trump’s trade team, who was instrumental in developing the reciprocal tariffs implemented on “Liberation Day,” essentially stated that the administration does not want tariff reciprocity – which was, ostensibly, the reason for levying these tariffs in the first place. This acknowledgement further underscores the fact that “Liberation Day” tariff rates, calculated based on trade deficits rather than the combination of tariff and non-tariff barriers, were never intended to create fair, reciprocal trade agreements. The tariffs instead were rooted in a misconception that trade deficits are inherently bad because they indicate that the United States is subsidizing other countries (see more about “Liberation Day” fallacies here). Furthermore, this reveal by Lutnick destroys any argument the U.S. trade team previously had about the United States being an open market that is simply leveling the playing field for world trade.

Looking Ahead: Lutnick’s comments will likely throw cold water on any U.S. trade talks with Vietnam, as the cat’s out of the bag that even if Vietnam lowered its tariff rate to zero (as was the initial bar set by the administration), U.S. tariffs would remain in place. The prospect of Vietnam cutting off trade with China – and recall that the two countries share a border – for the possibility of a trade deal with the United States seems like an extreme stretch, especially when such an agreement may only create a marginally better trade environment compared to the one before Trump took office. With true reciprocity off the table, Vietnam and many other U.S. trade partners will have a much-reduced incentive to lower their non-tariff barriers moving forward.

Ongoing Section 232 Investigations and End Date Deadlines

The above chart shows the ongoing investigations into certain sectors that may result in additional tariffs. The listed end dates suggest these investigations take exactly 375 days to complete, although, it is likely they could be expedited and take anywhere from 300–340 days.