Amid domestic legal challenges and a lack of deals with trade partners, time is running out for Trump to score ‘Liberation Day’ victories
Over the past two weeks, the New York-based Court of International Trade has held its first oral arguments in lawsuits challenging US President Donald Trump’s “Liberation Day” tariffs and the administration’s authority to impose the kind of levies previously placed on China, Canada and Mexico over the US’ deadly fentanyl crisis.
A group of small American businesses and 12 states have argued in separate but similar cases that Trump’s use of emergency executive powers to impose tariffs exceeds his authority. The Trump administration countered that a legal defeat would “completely kneecap” the president amid ongoing trade negotiations with major partners, including China.
Brett Shumate, representing the administration, told a three-judge panel last week that the tariffs were designed to “create pressure” and “bring trading partners to the table”. He warned that any injunction suspending the tariffs would be “extremely disruptive”, describing Trump as “in the middle of foreign negotiations with other countries about trade deficits and about the fentanyl crisis”.
In April, Trump claimed he could secure more than 50 trade deals within 90 days. But nearly two months later, progress remains limited. The US has announced only one agreement, with Britain, while negotiations with other partners have stalled or remain unclear. To maintain negotiating leverage, Washington must act swiftly to secure additional deals. Delays could strengthen China’s position, escalate trade tensions and prolong the economic burden of tariffs on American businesses and consumers.
Trump’s tariff policies have created confusion among trading partners and disrupted global supply chains. In April, tariffs on Chinese imports briefly surged to 145 per cent before being partially rolled back to 30 per cent following talks in Geneva, Switzerland, earlier this month.
A 10 per cent baseline tariff on most other countries remains in place, with a 90-day reprieve set to expire on July 8. The deal with Britain, announced earlier this month, was touted by Trump as a model for trade agreements.
The arrangement includes reduced British tariffs on US meat and ethanol, providing new market access for American farmers and ranchers. However, key details, such as the timeline for implementation, remain unclear. The 10 per cent tariff on British imports also remains, limiting the deal’s overall impact.
US Commerce Secretary Howard Lutnick, who has taken a pivotal role in negotiations alongside Treasury Secretary Scott Bessent, recently expressed optimism that a series of deals could be finalised by midsummer without raising consumer prices. Meanwhile, last week, Lutnick met Indian Commerce Minister Piyush Goyal – but under any preliminary deal, India is reportedly demanding that the US lift existing tariffs, highlighting the complexity and friction in these negotiations.
Trump recently claimed that India – a key Indo-Pacific partner which could face 26 per cent tariffs after July 8 – had offered to cut its taxes on US imports to zero, though New Delhi has disputed the claim. Meanwhile, Trump has threatened to impose a separate 25 per cent tariff on tech giant Apple if it builds factories outside the US, in particular naming India, as the company looks to diversify operations amid US-China tensions.
Europe is also facing headwinds, as Trump has rejected a zero-for-zero tariff deal. The European Union is preparing nearly US$108 billion in retaliatory tariffs should negotiations collapse, signalling strong resistance to Trump’s approach.
On Friday, Trump floated a blanket 50 per cent tariff on EU imports, later adding that he wasn’t “looking for a deal” with the bloc.
Negotiations with China, Canada and Mexico remain in the early stages while talks with Japan, South Korea and Vietnam have shown some momentum but have yet to produce tangible results. Time is running short. Trump has indicated that countries will soon be formally notified of the tariffs they will face to do business with the US, citing insufficient time to negotiate individual deals before the July deadline.
This patchwork strategy, combined with the absence of finalised agreements, risks undermining US leverage. China, acutely aware of Washington’s limited trade alternatives, may feel little pressure to make meaningful concessions. Without deals with major economies in the EU or Southeast Asia, the US will have fewer options to divert trade away from China.
At the same time, China’s targeted restrictions on rare earths and other critical minerals underscore its willingness to wield economic power strategically. For the US, securing trade agreements with mineral-rich allies like Australia and Canada is not just strategic, it’s vital. Without them, Washington’s negotiating hand weakens, and its economic security becomes more vulnerable.
In court, the Trump administration argued that the president’s emergency declaration is a non-reviewable “political question” aimed at securing favourable trade deals. However, without tangible diplomatic wins, Trump’s aggressive tariff strategy risks alienating allies and emboldening rivals while burdening American businesses and consumers. The coming weeks will determine whether Trump’s high-stakes gamble yields strategic victories or costly isolation.
