The Trump administration has urged trading partners to submit their best trade proposals by June 4, aiming to finalize negotiations before the July 8 deadline.

This follows President Trump’s decision to pause broad tariffs in April amid market volatility.

A draft letter from the US Trade Representative, obtained by Reuters, outlines requests for tariff and quota offers, commitments on non-tariff barriers, and digital trade and economic security issues.

The letter stresses urgency in wrapping up talks with the EU, Japan, Vietnam, and India. It notes the US will quickly assess responses and propose reciprocal tariff rates.

An official said negotiations are moving swiftly, with mutual interest in tracking progress.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ US tariff rates now at historic levels not seen since the Great Depression era

The current US tariff policy represents an extraordinary shift in modern trade history. According to Yale’s Budget Lab analysis, the average effective tariff rate has reached 17.8%, the highest since 1934 during the aftermath of the Great Depression-era Smoot-Hawley tariffs 1.

This dramatic increase follows a decades-long trend of declining tariff rates after World War II, when the US led the establishment of the General Agreement on Tariffs and Trade (GATT) and later the World Trade Organization specifically to avoid repeating historical mistakes 2.

The Smoot-Hawley Tariff Act of 1930 raised rates to similar levels, prompting retaliatory measures from trading partners that economists widely believe deepened and prolonged the Great Depression by collapsing global trade 3.

Today’s tariffs have also led to retaliatory measures. China has announced a 34% additional duty on all US imports alongside export controls on critical materials, while Canada has implemented 25% tariffs on US automobiles 4.

Historical evidence suggests such escalating trade wars typically harm all parties involved, as reflected in projections that current US tariffs could reduce GDP by 0.7 percentage points while increasing consumer prices by 1.7% 1.

2️⃣ Tariffs function as a regressive tax that disproportionately burdens lower-income Americans

Despite being framed as protection for American workers, economic analyses consistently show tariffs place a heavier financial burden on lower-income households compared to wealthier ones.

The Tax Foundation calculates that tariffs reduce after-tax incomes by 0.30% on average, with lower-income households bearing a disproportionate share of this burden 5.