Tariff Pause Extended: What Comes Next?

July 10, 2025

The U.S. government has decided to extend a planned pause on tariffs. This gives more time for international trade talks.

Originally set to expire on July 9, 2025, the tariff freeze will now remain in place until August 1, 2025. This three-week extension gives important trading partners more time to make agreements with the United States. These agreements could greatly affect industries, consumers, and investors.

A Temporary Reprieve

The extension was confirmed in a formal notice from the White House on July 7, 2025. In that announcement, the administration indicated that letters were sent to 14 countries outlining proposed tariff rates. While most of the rates mirror those announced back in April, the administration signaled flexibility and a willingness to negotiate further. More notifications to other nations may follow in the coming days.

During this pause, the existing 10% baseline tariff remains in place. If no deals are made or if no more delays are given by the August 1 deadline, new tariffs will start. Some of these tariffs could be as high as 70%. These heightened tariffs would vary by country and product category, with industries such as autos, agriculture, steel, and technology particularly exposed.

Why Tariffs Matter to Markets

Unlike temporary geopolitical headlines or interest rate rumors, tariffs have a direct impact on corporate earnings. They influence the cost structure of companies that rely heavily on imports and global supply chains. That’s why the stock market reacted so sharply when tariffs were first proposed in April—only to partially recover once the initial pause was announced.

This week's market response has been more restrained. Analysts suggest that investors may be cautiously optimistic, assuming the eventual tariff rates won’t be as damaging as originally feared. However, with no final deals in place, uncertainty continues to cast a shadow over investor sentiment.

What to Expect Before August 1

Negotiations remain underway between the U.S. and 18 major trading partners, representing more than 90% of total U.S. trade volume. While there is hope that some agreements will be finalized by the new deadline, complex political and economic factors make rapid progress difficult. As a result, it’s unlikely that all major trading relationships will be resolved in the next few weeks.

Here's a snapshot of where things currently stand:

●     United Kingdom: Became the first country to finalize a deal, locking in the current 10% tariff rate.

●     China: Ongoing negotiations continue with a temporary pause on most tariffs until mid-August. A June agreement on rare-earth minerals suggests potential cooperation.

●     Japan & South Korea: Both countries are in talks with the U.S. on tariffs for steel, autos, and agriculture. However, without a deal, tariffs as high as 25% could be implemented.

●     European Union: Internal divisions within the EU, especially between Germany and France, are slowing progress. Germany favors a swift resolution to minimize economic fallout, while other member nations are more cautious.

●     Canada: Discussions collapsed in June, and no new negotiations have resumed. A 25% tariff remains in place on select Canadian imports.

●     Vietnam: A finalized trade pact includes a 20% tariff on goods and a 40% rate on trans-shipped items. Vietnam has removed its own tariffs on U.S. imports as part of the deal.

●     BRICS nations: The administration has hinted at new 10% levies on countries aligning with BRICS+ partners such as Iran, Egypt, and Indonesia.

Where Talks Are Stalled

Several major partners show little urgency in reaching a deal. India has publicly rejected the U.S.-imposed timeline and has even threatened to impose its own retaliatory tariffs in August. Japan appears unlikely to agree to U.S. terms anytime soon, and intra-European disagreements are slowing any unified EU response.

Market Implications

So far, both equity and bond market volatility has dropped from the peaks seen in April. The CBOE Volatility Index has declined more than threefold, while bond market volatility—as measured by the ICE BofA MOVE Index—has also decreased significantly.

That said, this calm could be temporary. If high tariffs are triggered in August, the market could face renewed turbulence. Businesses might delay spending, shift supply chains, or pass higher costs on to consumers. For investors, this introduces the risk of reduced corporate earnings and slower economic growth.

Navigating Uncertainty

For investors focused on long-term outcomes, the best strategy may be to stay diversified. A balanced portfolio with a mix of equities and fixed income can help manage risk and benefit from any upside tied to continued economic resilience.

As the new tariff deadline approaches, all eyes will remain on Washington and its trading partners. Whether the world edges closer to new agreements—or a new wave of tariffs—will shape not only the global trade landscape but also the performance of markets in the months ahead.

Sources:

https://www.fidelity.com/learning-center/trading-investing/tariff-extension

Disclosure:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.