Trump to begin sending first tariff letters on Monday

The rollout of President Donald Trump’s first batch of tariff warning letters marks a sharp pivot in trade strategy—one that prioritizes political optics and maximum leverage over measured negotiation. While these letters may read like procedural notifications, they carry the weight of a strategic escalator: a signal that the US is no longer waiting for consensus, but rather forcing the hand of its trading partners. This isn’t a return to 2018’s chaotic tariff cycles—it’s something more methodical, and potentially more disruptive.

As the 90-day negotiation pause imposed in April nears its July 10 expiry, the letters arriving at foreign ministries across the globe are doing more than reminding counterparts of missed deadlines. They are resetting the negotiation table around US terms, establishing a clear binary: sign a deal, or face snapback tariffs—some as high as 50%. The threat of an additional 10% tariff on countries aligning with the BRICS bloc only deepens the sense that this is not just economic policy. It is strategic positioning.

On April 2—what Trump dubbed “Liberation Day”—the US stunned global markets by imposing sweeping 10% import tariffs on most trading partners, escalating up to 50% for targeted regions like the EU. After a steep market correction, the administration paused the rollout for 90 days to allow for dealmaking. But little headway has been made, save for temporary reprieves negotiated with Britain, Vietnam, and a tentative easing between Washington and Beijing.

Now, with the pause nearing its end, Trump is leveraging the ambiguity built into his tariff scheme. He claims the new letters are merely the beginning, hinting at 12 to 15 communications going out. But the letters also serve as a litmus test—who will bend, who will stall, and who will escalate in return?

Though framed as administrative steps, the tariff letters function as pressure instruments. They give trading partners a stark choice: comply with Washington’s demands for bilateral deals, or face the restoration of the punitive April tariffs. By moving ahead of the Wednesday deadline, the White House reclaims initiative in the negotiating timeline and sets an implicit countdown to August 1, the date when the tariffs are scheduled to snap back.

Importantly, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have clarified that this is not an extension of the 90-day pause—it’s an operationalization of Trump’s “maximum pressure” strategy. By setting August 1 as the tariff activation date, Washington creates a psychological incentive for foreign governments to finalize deals before global markets digest the consequences.

Perhaps the most telling signal came not in the timing, but in the content of Trump’s messaging. His threats of an additional 10% tariff on countries aligning with BRICS—following the group’s condemnation of US trade policy—recasts the tariffs not as tools of economic correction, but as litmus tests for political allegiance.

This shift moves the US closer to a bifurcated global trade order, where economic policy becomes an overt expression of geopolitical alignment. It’s not simply about trade deficits anymore. It’s about who stands with—or against—Washington’s preferred terms of global commerce. The result is a polarization of capital flows, deal-making timelines, and risk tolerance across multinational portfolios.

Reactions across capitals reflect diverging regional priorities. Japan’s Prime Minister Shigeru Ishiba made clear his government “won’t easily compromise,” signaling a slow negotiation path. In contrast, the EU—despite internal skepticism—appears to be moving toward a more conciliatory position. France’s finance minister voiced optimism over the weekend, and Bessent himself noted that European negotiators are now “making very good progress.”

This divergence matters because it creates inconsistencies in capital certainty. For multinationals operating across the EU and Asia, the ability to forecast supply chain tariffs, product pricing, and investment cycles becomes highly fragmented. With trade certainty eroded, companies face a volatile Q3 planning horizon.

From a strategic operator’s perspective, the tariff letter rollout functions less as a policy event and more as a capital forcing mechanism. It places sovereign and corporate actors in a position where hedging against uncertainty becomes more costly than conceding to US terms. For corporates, this means reevaluating how cross-border supply chains are exposed to policy whim. For governments, especially those in Europe and Asia, the pressure to finalize deals without appearing weak domestically will test political capital.

Meanwhile, sovereign funds and multinational banks must recalibrate their allocation timelines, treating August 1 not just as a policy activation date but as a potential volatility spike. Even if tariffs are delayed further, the perceived willingness to weaponize trade levers forces a reassessment of risk-weighted asset flows.

The 2025 tariff campaign reveals a deeper strategic posture. Trump’s approach is no longer purely transactional. It’s behavioral conditioning, built on a carrot-stick spectrum of bilateralism, designed to replace multilateral drift with enforceable compliance. The use of staggered tariffs, public shaming, and geopolitical punishment (via the BRICS penalty) indicates a playbook designed not just for leverage, but for reframing loyalty in economic terms.

If successful, it could shift how future administrations approach trade—from economic diplomacy to power brokerage. If it backfires, it could fragment the global system further, encouraging BRICS-aligned nations to accelerate parallel institutions or payment networks.

While the market fixates on tariff levels and deadlines, the real shift lies in how Washington is repricing compliance. Deals struck under duress aren’t just transactional—they alter the precedent for future negotiations. This isn’t a delay tactic or a temporary stunt. It’s a structural recalibration of what trade loyalty costs—and who’s willing to pay it.