Trump moving forward on July 9 tariffs, despite court losses

President Donald Trump and senior members of his administration continued to press ahead on their aggressive tariff policy, despite losing initial court challenges over much of the president’s agenda on taxing imports.

In comments to reporters made June 11, Trump said that he planned to move forward with tariffs on imports from countries listed in his April 2 announcement — though whether those tariffs would be at the same level he “paused” until July 9 remains to be seen.

“We’re going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is,” Trump said to reporters on June 11, according to Bloomberg.

However, hours before Trump spoke to reporters, Treasury Secretary Scott Bessent told the House Ways and Means Committee in testimony that the administration is “highly likely” to push the July 8 deadline for 18 trade partners it is negotiating with. Whether that still applies after Trump’s remark about setting a fresh ultimatum remains to be seen.

Elaborating on Trump’s comment, Commerce Secretary Howard Lutnick said that the administration would set new tariff rates on imports from countries based on their progress in negotiations and then expect additional action from those countries for lowered rates. 

“We’re going to get all their terms in, we’re going to get their best terms, and the president, as he said, he’s going to write them a letter saying, ’Look, here was your best terms, here’s your rate. If you want to do this, you can have a better rate, and let’s just lay it out and get it done,’” said Lutnick in a televised interview on June 12.

During Bessent’s appearances on Capitol Hill, members of Congress from both parties signaled a desire for the administration to settle its trade disputes to provide businesses certainty.

“I think the sooner we could announce one or two or three agreements, it would notify to the country that you’re on the right track,” said Sen. Chuck Grassley, R-Iowa.

China progress?

Also on June 11, Trump signaled that another round of negotiations — this time in London — between Bessent, U.S. Trade Representative Jamieson Greer, and their Chinese counterparts, may yield longer-term stability to U.S.-China trade relations.

“WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT!” Trump posted on social media, though he caveated the agreement, which appears to be nonbinding, would still require sign-off from both him and Chinese President Xi Jinping.

Details of the agreement remain scarce, but it includes at least a temporary lift of rare earth mineral exports to the U.S. A 55% baseline tariff would be an increase from the 30% rate Trump temporarily imposed following previous talks between Bessent, Greer and Chinese officials in Switzerland. It would also mark a significant shift from the near-embargo that lasted for more than a month when the U.S. raised tariffs on Chinese products to a baseline 145% and China retaliated with 125% on U.S. goods.

IEEPA uncertainty

Trump has invoked the International Economic Emergency Powers Act (IEEPA) to impose the country-specific tariffs introduced on April 9, as well as a 10% universal tariff and other new tariffs on Chinese, Canadian and Mexican products. He is the first president to use that law — typically invoked to impose economic sanctions on terrorist organizations or rogue states, to impose tariffs. That use of IEEPA has been successfully challenged in court but is being appealed by the administration; on June 10, the U.S. Court of Appeals for the Federal Circuit maintained a stay on a broad injunction on the IEEPA tariffs, keeping them in place while the appeals process plays out.

Whether plaintiffs in the cases — a wine importer and 12 states — ask for additional court intervention to prevent the July 9 tariffs from going into place during the appeal remains to be seen.

The administration, which initially maintained the April 9 tariffs were not a negotiating tactic before pivoting to pause them after 13 hours to allow for negotiations — also appears split on whether July 9 will be a hard deadline or if negotiations with countries will continue. Administration officials have promised that the talks will lead to more ad hoc deals like the one announced with the United Kingdom in May.

Product tariffs remain

Tariffs placed on individual products, regardless of their country of origin, would be unaffected if courts ultimately conclude that Trump exceeded his authority in using IEEPA. The so-called sectoral tariffs stem from a different law granting the president that type of power. On June 3, days after the initial court rulings against his use of IEEPA for tariffs, Trump increased tariffs on steel, aluminum and derivative products to 50%. The administration also has ongoing trade investigations into copper, lumber, timber, derivative products of those materials, semiconductors, rare earth minerals and pharmaceuticals, among other trade actions still on the table.

Tariffs and income taxes

In recent congressional testimony, Bessent defended not only the administration’s tariffs but also the proposed Section 899 retaliatory measures for foreign taxes included in the House version of Republican’s tax and budget legislation, the One Big Beautiful Bill Act (OBBBA), (H.R. 1).

“For whatever reason, the previous administration chose to outsource sovereignty on U.S. national tax matters,” Bessent said, referencing the Organisation for Economic Co-Operation and Development negotiations the Biden administration took part in. “This bill will allow us to prevent our corporate revenues from being drained into foreign treasuries, and that is in the hundreds of billions of dollars.”

Bessent also further tied the administration’s tariff agenda to its income tax agenda as part of one comprehensive industrial plan, during appearances before the Ways and Means and Senate Finance committees on June 11 and 12.

While the administration rejects official scoring from the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) showing that the House version of the OBBBA would increase federal deficits by $2.4 trillion over 10 years, Bessent cited the CBO’s estimate that sustained universal tariffs — with a higher rate on China — would raise approximately $2.8 trillion over the same period. However, the CBO also estimated those tariffs would substantially reduce economic growth. 

“You can’t take one without the other,” said Bessent, referring to the CBO estimates and noting, “In Washington, D.C. math, that is a $400 billion surplus.”

Tariff revenue cannot be officially counted within the budget reconciliation process Republicans are using to bypass a filibuster in the Senate. However, administration officials and some congressional Republicans have argued the tariffs will offset reduced revenue from extended and expanded tax cuts. 

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