We expect possible tariff increases on July 9 to remain smaller in scale compared to the salvo announced on April 1st ‘Liberation Day’.
US could strike preliminary deals with trading partners to buy time for more thorough negotiations. Treasury Secretary Bessent has appeared ready to postpone the deadline towards fall for countries negotiating in ‘good faith’.
Legality of country-specific ‘reciprocal tariffs’ and the unclear outlook for new sectoral tariffs complicate the negotiations. Stricter stance on limiting re-routing of trade could mean higher tariffs for especially SEA countries, and cause tariffs to bite harder on the American consumer.