What’s next for U.S. tariff negotiations?

While attention often centers on the U.S.–China tariff relationship or the stability provided by the U.S.-Mexico-Canada Free Trade Agreement (USMCA), a new chapter of global trade discussions is unfolding.

On April 2, 2025, the U.S. government invoked the International Emergency Economic Powers Act (IEEPA) to announce reciprocal tariffs on imports from countries around the world, setting the stage for a rapid round of negotiations. The country-specific rates were subsequently lowered to a blanket 10%, except for China, while these negotiations occur.

Three tracks, one goal: Tariff realignment

The United States now appears to be approaching its global trade relationships on three separate tracks:

1. Canada and Mexico remain relatively stable in the short term. Under USMCA, most certified freight continues to move duty-free, and no immediate changes are expected.
2. China, still the most volatile and complex trade partner, is on its own separate and highly unpredictable trajectory.
3. For the rest of the world, top trade partners including Japan, Korea, Vietnam, the EU, the UK, and India appear to be prioritized.

What to expect from these talks

Rather than full-scale free trade agreements, these negotiations are expected to yield limited but strategic commitments, similar to the “Phase 1” deal reached with China in 2020. Countries may agree to purchase more U.S. goods, reduce specific trade barriers, or invest in U.S. industries in exchange for the suspension or removal of reciprocal tariffs, currently set at 10% under IEEPA (higher for China).

Tariff timeline and outlook

The U.S. Trade Representative (USTR) has begun a fast-track process to host bilateral talks with many of these countries during the first half of May. These initial meetings are expected to be followed by a second round to finalize commitments. For many countries, the goal is to reach agreements by July 8, 2025, the last day before the current 90-day pause on the higher reciprocal tariffs expire.

The first formal announcements with countries like Korea, Vietnam, Japan, the EU, the UK, or India are likely to be announced in late May or early June. Until then, public commentary on the progress of these discussions is likely while details are still reviewed.  

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