July 4, 2025 • 8 mins
As the US President's July 9 tariff pause deadline approaches, more countries are announcing agreements with the United States to avoid higher levies. But the content of the accords are very different from traditional trade deals. Our EMEA News Director Rosalind Mathieson joins host Stephen Carroll to discuss.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:08):
I'm Stephen Carol and this is Here's Why, where we
take one new story and explain it in just a
few minutes with our experts here at Bloomberg.
Speaker 1 (00:18):
We made a deal with probably four or five different countries.
Speaker 3 (00:22):
With the UK, it was a great deal for both.
Speaker 2 (00:25):
And we're in the process of making some others.
Speaker 3 (00:27):
This is unfolding exactly like we thought it would.
Speaker 2 (00:31):
We've got ninety deals in ninety days, possibly pending here.
We will cut those deals as soon as we possibly can.
Country by country, tailor made deals for each and every
country as they all propose unique challenges.
Speaker 1 (00:44):
As always, there's going to be a flurry going into
the final week as the pressure increases.
Speaker 2 (00:51):
It's a race to the finish line for countries to
get a deal before Donald Trump's tariff pause elapses on
the ninth of July. The US President's to redraw global
trade relations as one of the centerpieces of his election campaign.
It's a strategy with high stakes for the global economy
and America's relationships with allies and adversaries alike. But the
(01:13):
deals announced so far don't resemble traditional trade agreements. Here's why.
Donald Trump's trade deals are so different this time. Our
ea ANDS director Rosala Matheson joins me now for more,
ros remind us what did Donald Trump set out to
achieve with this trade offensive.
Speaker 3 (01:34):
It's basically amping up make America Great again, his policy
of MAGA, which is promising voters when he was coming
into the election that he would bring back jobs, he
would bring back manufacturing, and he would make America the
centerpiece of that.
Speaker 1 (01:52):
And he needs to get the wins on the.
Speaker 3 (01:54):
Board pretty quickly as a result, to show the US
people that he is delivering on those election promises. Even
if the trade deals that he's getting so far abroad outlines,
he can stack them up and say look what I've
got for you already in terms of helping the economy
and American jobs. So there's that aspect to it. But
(02:14):
there's also for Donald Trump, really an underlying belief here
that he seems to harbor, which is that for many
years the US gave its leverage away, it let other
countries take advantage of it when it comes to trade
an investment, and that the US now needs to reorganize
that and bring some of that leverage back home. And
part of this trade offensive is for him about leveling
(02:37):
that field a bit, and that seems to be quite
a fundamental belief that he holds underneath all his election promises.
Speaker 2 (02:44):
How different is this strategy to what we've seen previous
presidents do on the trade front.
Speaker 3 (02:50):
There are three things that really stand out there. One
is that he approaches everybody as a competitor, so whether
they're a long standing ally in Asia or in Europe
or an adversary like China. I mean, he was pretty
tough in his first term, including with Asian allies, but
he's a lot tougher now and very much doing so publicly.
(03:10):
So approaching everybody as a competitor, no matter what the
broader frame is of that relationship. Another thing that he's doing,
which is different is bundling everything into the conversation. He
really does blur the lines. You know, other leaders, notably
Barack Obama and Joe Biden before him, they tried to
bifurcate things, put them into compartments. So you had trade
(03:33):
in one bucket and it was independent really from the
broader relationship. So if you had political tensions that were
separated out, security matters separated out. Donald Trump keeps it
all in one soup together. So a trade deal might
involve in Donald Trump's mind the status of defense contracts,
for example, So that's very different. And also he's very changeable.
(03:54):
He's really cutting out bureaucrats a lot, driving this personally
from the White House with his in a call, and
he's very hard to read as a result. He can
change his mind quickly. He can go from happy to
angry and back again, and that makes negotiating or understanding
where you lie with the US very difficult.
Speaker 2 (04:13):
How can we describe the results then, that have been
achieved so far? What sort of agreements have been reached?
Speaker 3 (04:19):
The agreements that have been reached are very broad. They're
almost more like MOUs than a trade deal. They're a
framework maybe, and we can see that very much in
the deals that have been struck so far. They have
general terms normally the headline figures on tariffs, and they
punt the really hard stuff, the complicated detail that you
normally see in a trade deal, well down the track.
(04:41):
And so you get a very general understanding in those
initial frameworks, and then the senses that the bureaucrats are
allowed to get down to work in a trade deal.
Speaker 1 (04:51):
Normally it takes many years to get there.
Speaker 3 (04:53):
These are thousands of pages of documents and great complexity throughout.
Speaker 1 (04:59):
These agreements so far are very very general.
Speaker 2 (05:02):
What sort of issues could arise with having these sort
of framework agreements instead of those deeper trade agreements that
were things that we were more used to in the past.
Speaker 3 (05:13):
One of the things that you can risk is confusion
on the implementation side, and in fact, we've seen that
before with the US and China previous understandings and then
one country accusing the other of not holding to that understanding,
and a lot of confusion in the aftermath.
Speaker 1 (05:30):
Mean, do you end up with one country.
Speaker 3 (05:31):
Saying, hang on, you're not complying and one country is saying,
I'm not quite sure what we're supposed to be complying too.
And if those understandings are so general, it's very easy
to accuse the other country of not making good on it.
And it might not be because of ill intent, but
the other country simply doesn't quite know, They have maybe
a perception in their mind of what the arrangements.
Speaker 1 (05:51):
Are versus the other.
Speaker 3 (05:53):
So a real risk in all of this is you
do get a lot of confusion in implementing the agreement
even its broadest terms. And also how do you then
get the meat on the bone. So the problem is
how do you go from those very broad frameworks into
something much more detailed, and how do you get the
impetus for that to go. Donald Trump seemingly just wants
(06:14):
the headline figures and moves on. But where is the
push coming to really sit down and tackle the more
complex issues.
Speaker 2 (06:20):
Could other countries take the same approach that Donald Trump
and the United States have taken to trade? Could this
actually be a new form of trade relations that's now emerging.
Speaker 3 (06:31):
Well, it does seem that getting just something on paper
may be an approach that other countries take too, sort
of a trade light approach and MoU you know, keep
the detail for later and at least get something down
so you avoid an escalating trade war with other countries.
And so you know, for a lot of countries, things
around the movement of people services, that's all very complex.
(06:52):
So that might be one way to get something down initially.
But again it's all about your leverage. It's easy for
Donald Trump to take this approach, which is quite a
lot of stick and using the clout of the US
to force things over the line, when you're the biggest
player in the room, if you're a much smaller country,
your leverage is a lot smaller and your ability to
(07:14):
negotiate even these kinds of frameworks diminishes. I mean, if
you're a big block like the EU, a country like China,
but even a country like Japan has had a lot
of struggles here with the US despite being a massive
investor in the US, despite having that trade clout. Canada equally,
and if those big countries are struggling, then the smaller
ones definitely will, and it doesn't feel like it's a
(07:36):
template therefore that they could adopt.
Speaker 2 (07:39):
Okay, Roslad Mason Er EMEA News Director, Thank you very much.
For more explanations like this from our team of three
thousand journalists and analysts around the world, go to Bloomberg
dot com slash explainers. I'm Stephen Carroll. This is here's why.
I'll be back next week with more. Thanks for listening.
Speaker 3 (08:00):
D
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:08):
I'm Stephen Carol and this is Here's Why, where we
take one new story and explain it in just a
few minutes with our experts here at Bloomberg.
Speaker 1 (00:18):
We made a deal with probably four or five different countries.
Speaker 3 (00:22):
With the UK, it was a great deal for both.
Speaker 2 (00:25):
And we're in the process of making some others.
Speaker 3 (00:27):
This is unfolding exactly like we thought it would.
Speaker 2 (00:31):
We've got ninety deals in ninety days, possibly pending here.
We will cut those deals as soon as we possibly can.
Country by country, tailor made deals for each and every
country as they all propose unique challenges.
Speaker 1 (00:44):
As always, there's going to be a flurry going into
the final week as the pressure increases.
Speaker 2 (00:51):
It's a race to the finish line for countries to
get a deal before Donald Trump's tariff pause elapses on
the ninth of July. The US President's to redraw global
trade relations as one of the centerpieces of his election campaign.
It's a strategy with high stakes for the global economy
and America's relationships with allies and adversaries alike. But the
(01:13):
deals announced so far don't resemble traditional trade agreements. Here's why.
Donald Trump's trade deals are so different this time. Our
ea ANDS director Rosala Matheson joins me now for more,
ros remind us what did Donald Trump set out to
achieve with this trade offensive.
Speaker 3 (01:34):
It's basically amping up make America Great again, his policy
of MAGA, which is promising voters when he was coming
into the election that he would bring back jobs, he
would bring back manufacturing, and he would make America the
centerpiece of that.
Speaker 1 (01:52):
And he needs to get the wins on the.
Speaker 3 (01:54):
Board pretty quickly as a result, to show the US
people that he is delivering on those election promises. Even
if the trade deals that he's getting so far abroad outlines,
he can stack them up and say look what I've
got for you already in terms of helping the economy
and American jobs. So there's that aspect to it. But
(02:14):
there's also for Donald Trump, really an underlying belief here
that he seems to harbor, which is that for many
years the US gave its leverage away, it let other
countries take advantage of it when it comes to trade
an investment, and that the US now needs to reorganize
that and bring some of that leverage back home. And
part of this trade offensive is for him about leveling
(02:37):
that field a bit, and that seems to be quite
a fundamental belief that he holds underneath all his election promises.
Speaker 2 (02:44):
How different is this strategy to what we've seen previous
presidents do on the trade front.
Speaker 3 (02:50):
There are three things that really stand out there. One
is that he approaches everybody as a competitor, so whether
they're a long standing ally in Asia or in Europe
or an adversary like China. I mean, he was pretty
tough in his first term, including with Asian allies, but
he's a lot tougher now and very much doing so publicly.
(03:10):
So approaching everybody as a competitor, no matter what the
broader frame is of that relationship. Another thing that he's doing,
which is different is bundling everything into the conversation. He
really does blur the lines. You know, other leaders, notably
Barack Obama and Joe Biden before him, they tried to
bifurcate things, put them into compartments. So you had trade
(03:33):
in one bucket and it was independent really from the
broader relationship. So if you had political tensions that were
separated out, security matters separated out. Donald Trump keeps it
all in one soup together. So a trade deal might
involve in Donald Trump's mind the status of defense contracts,
for example, So that's very different. And also he's very changeable.
(03:54):
He's really cutting out bureaucrats a lot, driving this personally
from the White House with his in a call, and
he's very hard to read as a result. He can
change his mind quickly. He can go from happy to
angry and back again, and that makes negotiating or understanding
where you lie with the US very difficult.
Speaker 2 (04:13):
How can we describe the results then, that have been
achieved so far? What sort of agreements have been reached?
Speaker 3 (04:19):
The agreements that have been reached are very broad. They're
almost more like MOUs than a trade deal. They're a
framework maybe, and we can see that very much in
the deals that have been struck so far. They have
general terms normally the headline figures on tariffs, and they
punt the really hard stuff, the complicated detail that you
normally see in a trade deal, well down the track.
(04:41):
And so you get a very general understanding in those
initial frameworks, and then the senses that the bureaucrats are
allowed to get down to work in a trade deal.
Speaker 1 (04:51):
Normally it takes many years to get there.
Speaker 3 (04:53):
These are thousands of pages of documents and great complexity throughout.
Speaker 1 (04:59):
These agreements so far are very very general.
Speaker 2 (05:02):
What sort of issues could arise with having these sort
of framework agreements instead of those deeper trade agreements that
were things that we were more used to in the past.
Speaker 3 (05:13):
One of the things that you can risk is confusion
on the implementation side, and in fact, we've seen that
before with the US and China previous understandings and then
one country accusing the other of not holding to that understanding,
and a lot of confusion in the aftermath.
Speaker 1 (05:30):
Mean, do you end up with one country.
Speaker 3 (05:31):
Saying, hang on, you're not complying and one country is saying,
I'm not quite sure what we're supposed to be complying too.
And if those understandings are so general, it's very easy
to accuse the other country of not making good on it.
And it might not be because of ill intent, but
the other country simply doesn't quite know, They have maybe
a perception in their mind of what the arrangements.
Speaker 1 (05:51):
Are versus the other.
Speaker 3 (05:53):
So a real risk in all of this is you
do get a lot of confusion in implementing the agreement
even its broadest terms. And also how do you then
get the meat on the bone. So the problem is
how do you go from those very broad frameworks into
something much more detailed, and how do you get the
impetus for that to go. Donald Trump seemingly just wants
(06:14):
the headline figures and moves on. But where is the
push coming to really sit down and tackle the more
complex issues.
Speaker 2 (06:20):
Could other countries take the same approach that Donald Trump
and the United States have taken to trade? Could this
actually be a new form of trade relations that's now emerging.
Speaker 3 (06:31):
Well, it does seem that getting just something on paper
may be an approach that other countries take too, sort
of a trade light approach and MoU you know, keep
the detail for later and at least get something down
so you avoid an escalating trade war with other countries.
And so you know, for a lot of countries, things
around the movement of people services, that's all very complex.
(06:52):
So that might be one way to get something down initially.
But again it's all about your leverage. It's easy for
Donald Trump to take this approach, which is quite a
lot of stick and using the clout of the US
to force things over the line, when you're the biggest
player in the room, if you're a much smaller country,
your leverage is a lot smaller and your ability to
(07:14):
negotiate even these kinds of frameworks diminishes. I mean, if
you're a big block like the EU, a country like China,
but even a country like Japan has had a lot
of struggles here with the US despite being a massive
investor in the US, despite having that trade clout. Canada equally,
and if those big countries are struggling, then the smaller
ones definitely will, and it doesn't feel like it's a
(07:36):
template therefore that they could adopt.
Speaker 2 (07:39):
Okay, Roslad Mason Er EMEA News Director, Thank you very much.
For more explanations like this from our team of three
thousand journalists and analysts around the world, go to Bloomberg
dot com slash explainers. I'm Stephen Carroll. This is here's why.
I'll be back next week with more. Thanks for listening.
Speaker 3 (08:00):
D
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