"Tariff letter" will be sent out tonight! Peterson: If an agreement is not reached, tariffs will "rebound" to the level of the "Liberation Day".

In the final days before the expiration of Trump's 90-day reciprocal tariff suspension on July 9, the US President plans to announce a trade agreement on Monday and issue a tariff warning, while countries continue negotiations throughout the weekend in an effort to avoid the highest punitive measures on US export goods by the original deadline on Wednesday (July 9). After US officials suggested that trade partners could continue negotiations before the tariffs take effect on August 1, the negotiation schedule seemed to reset, giving them an additional three weeks for agreement negotiations. US Treasury Secretary Scott Bessent stated last Sunday that if the US's trade partners make no progress in the trade negotiations, tariffs will take effect on August 1, returning to the April levels. He commented: "President Trump will write to some trade partners, indicating that if you do not advance negotiations, then starting August 1, your tariffs will rebound to the April 2 level." However, Bessent earlier denied that August 1 was a new deadline. He said: "The final stage of affairs is very busy." "This is not a new deadline. We are just saying that things will happen on this day. If you want to speed up, then do it. If you want to go back to the original tax rate, that is your choice." Bessent also said: "We'll see, I will not disclose the entire strategy." When asked if the government would reach several agreements before Wednesday, Bessent replied: "I expect that several major announcements will be made in the coming days." Bessent stated that the 18 major trading partners are a priority, and several major agreements are expected to be announced. He also admitted that the ongoing negotiations have made the final stage complex. In addition, Trump posted on the Truth Social platform last Sunday evening: "I am pleased to announce that the tariff letters and/or agreements from the United States to countries around the world will begin to be sent out at 12:00 PM on July 7 (Monday), Eastern Time." He revealed last Sunday that he had signed about a dozen letters, which would be sent out on Monday, informing countries about tariff increases. He said: "I think by July 9, most countries will either receive the letters or reach an agreement, and some agreements have already been reached." Earlier last Friday, Trump also told reporters, "They will start paying taxes from August 1, and in almost all cases, funds will start flowing into the United States from August 1." US Commerce Secretary Howard Lutnick also stated that new tariffs on individual countries will take effect on August 1. EU: Progress made on agreements, still striving for Wednesday deadline As Trump's key 90-day pause on equivalent tariffs approaches, tariff uncertainties and negotiation progress in various countries are expected to dominate market attention for some time. The EU stated that progress has been made on reaching agreements and efforts are still being made for the Wednesday deadline. An EU Commission spokesperson stated on Monday in Brussels that Trump had a good conversation with EU Commission President Ursula von der Leyen on Sunday. German Chancellor Friedrich Merz's government spokesperson told reporters in Berlin on Monday that Merz had phone calls with von der Leyen, as well as with leaders of France and Italy over the weekend, discussing how to address the trade dispute with the US. Merz's chief spokesperson, Stephan Cornelius, stated during a routine government press conference in Berlin: "Time is running out." He added that Germany will continue to support the EU Commission's strategy in negotiations with the US, "it is a matrix that needs to consider many complex factors." Last week, Trump signed the "Big and Beautiful Act," with the NASDAQ and S&P 500 hitting historic highs. At this moment, Trump also seems to be using tariff power as a tool to pursue domestic economic interests and balance geopolitical adversaries. His latest threat is a 10% import tax on "any country that opposes the US in cooperation with BRICS countries." As BRICS countries, including Brazil, Russia, India, China, and South Africa, gathered in Rio de Janeiro last Sunday for a meeting, Trump posted on the Truth Social platform: "This policy will have no exceptions." Economic officials from countries including the EU and Japan continued negotiations with the US throughout the Independence Day holiday weekend (July 4). The Trump administration has been claiming for weeks that multiple agreements are about to be reached, but so far, only limited frameworks with the UK, a truce with China, and a brief outline with Vietnam have been announced. Morgan Stanley: Tariffs remain a key variable in market outlook Although it has been confirmed that significant tariff increases will start on August 1 instead of July 9, trade agreements and policies will still dominate news headlines in the coming weeks, and institutions have been discussing this. Morgan Stanley's base scenario expects that tariffs will only be moderately increased, but some new disruptive factors are also expected. The bank's strategist Michael Zezas stated: "But it is worth considering what might happen if things do not go as planned. Currently, there has been almost no public reporting on substantial progress in trade agreements." Zezas added that, in short, considering multiple scenarios is a prudent move. In one scenario, the White House may extend the suspension of tariffs on allies citing "progress" in bilateral negotiations, while also announcing high-level agreements with some trading partners (including Vietnam), and may schedule tariff hikes for other countries. Zezas said: "In this scenario, we expect that the EU, Japan, and other countries will ultimately maintain the current 10% base tariff rate, but may issue a statement saying that if certain negotiation conditions are not met, future rates may increase." Another scenario is that the government may choose to selectively and gradually reintroduce tariffs. Slow progress in negotiations could also lead to a decision to increase tariffs but delay implementation, leaving room for problem-solving. Zezas stated: "Looking in a more optimistic direction, the government may announce regional or bilateral frameworks - not complete trade agreements, but enough to clarify the direction of actual tariff rates, which tend to decrease, reducing uncertainty about future import costs." If tariffs are substantially increased, it may reinforce Morgan Stanley's more pessimistic economic outlook, which expects the GDP growth rate of the US to only be around 1% by the fourth quarter of 2025.