Treasury Secretary Scott Bessent said on Sunday that the steep tariffs President Donald Trump announced in April will go into effect on August 1 for U.S. trading partners that fail to reach new trade agreements with Washington before then.
The move ends a 90-day tariff reprieve that had calmed global markets but now reintroduces uncertainty, especially for countries still locked in trade talks with the administration.
Speaking on CNN’s State of the Union, Bessent made clear that letters will be sent this week to several countries notifying them of the looming reversion to the “April 2 tariff level” unless deals are struck in the coming days.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
“President Trump’s going to be sending letters to some of our trading partners saying that if you don’t move things along, then on August 1, you will boomerang back to your April 2 tariff level,” Bessent said.
Bessent rejected the idea that August 1 constitutes a new deadline, insisting instead that it is a final date for implementation.
“We are saying this is when it’s happening. If you want to speed things up, have at it,” he said, emphasizing that countries are free to renegotiate terms before the new rate takes effect.
Background: The April Tariff Shock and 90-Day Reprieve
In April, Trump stunned markets and allies by announcing sweeping “reciprocal tariffs” on nearly all major U.S. trading partners, citing decades of unfair treatment. But after widespread backlash and retaliatory threats from countries including Canada, Germany, South Korea, and Japan, the president issued a 90-day pause on implementation — a move that bought time for negotiations but also introduced confusion about the actual tariff timeline.
The initial deadline had been expected to hit July 9, based on Trump’s April 9 executive order. However, Bessent’s comments — along with remarks from Commerce Secretary Howard Lutnick and Trump himself — confirm that August 1 is now the effective date. Despite this shift, as of Sunday, the White House had not issued a revised executive order officially changing the date from July 9 to August 1.
“They’ll start to pay on August 1,” Trump told reporters Friday. “The money will start to come into the United States on August 1, in pretty much all cases.”
Implications on Market, Bilateral Ties
The decision puts intense pressure on U.S. allies to finalize new trade terms in the coming three weeks. Trump and Bessent suggested that “big announcements” of new agreements could arrive in the next few days. However, many economists warn that trade deals — even narrower tariff negotiations — often take years to conclude.
“Free trade arrangements the U.S. negotiated have taken an average of three years,” noted Rajeev Sibal, a senior global economist at Morgan Stanley. “Even though these talks are more targeted, the historical precedent remains informative.”
The administration’s aggressive tariff posture is raising red flags across financial markets. U.S. stock futures fell Sunday night following confirmation of the August 1 implementation date:
- Dow futures dropped 146 points, or 0.32%
- S&P 500 futures fell 0.39%
- Nasdaq 100 futures slipped 0.42%
This pullback comes despite a strong market rally last week, during which the S&P 500 and Nasdaq closed at record highs. Investors had largely believed that Trump’s “reciprocal” tariffs would not take full effect, especially after the White House downplayed the July 9 deadline, calling it “not critical.”
Wall Street’s Divided View
Markets are now navigating a precarious mix of optimism over corporate earnings and anxiety over sudden trade escalations. Some, like Tom Lee, head of research at Fundstrat Global Advisors, view the volatility as a potential upside story.
“I agree with anybody who says that, ‘Look, we’ve reshaped some of the economic flows around tariffs,’ but that’s an upside story because if it plays out better, that’s an earnings surprise,” Lee said Thursday on CNBC. “This is the most hated V-shaped rally.”
But others fear that the combination of record-high equity valuations and new trade barriers could inject fresh volatility. Companies with global supply chains are particularly exposed, especially if tariff rates increase beyond investor expectations or retaliatory measures resurface.
With time running out, all eyes will be on whether Trump’s team can lock in any trade concessions or partial agreements in the days ahead. While Bessent and Trump both suggested that letters to trading partners will go out Monday, the administration has so far avoided detailing which nations are closest to striking deals — and which ones are set to be hit by the full tariff regime.
Either way, unless the White House issues a formal reversal of the April executive order, August 1 is now set as the pivotal date — one that could define the trajectory of both U.S. trade policy and market sentiment for the rest of the year.