What To Expect From ‘Liberation Day’ 2.0

The clock is about to run out on President Donald Trump’s 90-day pause on the sky-high “Liberation Day” tariffs announced in April, and the administration has sent a flurry of messages about what exactly will happen Wednesday when the deadline expires.

The deadline could be a pivotal one for the economy, signaling whether the future will bring a flurry of trade deals breaking down barriers to international commerce, or whether Trump will re-impose the double digit “reciprocal” tariffs he set on multiple countries back in April, dragging down the economy and risking a serious downturn according to economists’ projections.

Here’s what Trump and his team have said in recent days about what to expect.

Trump is Setting Tariff Levels Through Letters

Trump sent letters to seven countries Monday, detailing the level at which tariffs will be set, effectively extending some deadlines.

Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos and Myanmar are all expected to have tariffs set at similar levels to those announced originally on April 2. The letters, posted by Trump on social media Monday, said that the U.S. was imposing the tariffs starting Aug. 1 because of long-standing trade deficits with each country.

It was unclear whether more letters were to come. However, Trump told reporters last week that the letters could set tariffs as high as 70% for some countries, which would be even higher than the “Liberation Day” tariff rates.

In the letter, Trump says he would change the tariff rate if the nations lowered their own trade barriers to U.S. products.

87 Deals In Two Days?

The Trump administration once promised the threat of tariffs would bring the world to the negotiating table to lower trade barriers and result in “90 deals in 90 days.”

So far, only one country, Vietnam, has struck a preliminary deal with the U.S. to avoid reciprocal tariffs. Last week, Trump announced a framework agreement setting Vietnam’s tariff rate at 20% rather than the 46% tariff he had announced April 2, in exchange for Vietnam lowering its tariff to nothing for U.S. products.

Earlier, Trump announced a limited trade deal with Great Britain, which was not subject to a reciprocal tariff, and a trade war truce with China that leaves high tariffs in place.

What Investors Are Betting Will Happen

Amid the confusion, financial market participants have been making educated guesses about what will happen on July 9.

The most likely scenario is that the White House would “kick the can” on negotiations, extending the pause for its top trading partners, citing progress on trade talks, Michael Zezas, a strategist at Morgan Stanley wrote in a note to clients.

“That would restart the countdown clock for some, giving negotiators more time to work out key differences,” he wrote. “We’d expect countries like the EU and Japan to eventually stay at the current 10% baseline rate in this scenario, albeit with potential announcements that these rates could go higher in the future if certain negotiation conditions aren’t met.”

Update, July 7, 2025: This article was updated after publication to include the letters President Donald Trump posted to social media.