President Donald Trump announced that his administration will begin sending letters today to US trading partners notifying them of new unilateral tariffs set to take effect on August 1.

The letters, expected to go to 10 to 12 countries initially, are part of a broader plan to finalize trade agreements or impose tariffs by a July 9 deadline, when a 90-day pause on new tariffs is set to expire.

According to Trump, the tariff rates outlined in the letters will vary widely, ranging from 10% to as high as 70%, depending on the country.

He did not provide details on which nations would receive the highest rates but emphasized that the tariffs would be applied unilaterally and that revenue from the measures would go to the United States.

Mixed signals from Washington

Deutsche Bank analysts noted the risk of rising tariffs but argued that recent signals from Washington suggest the administration may stop short of triggering a full-scale trade war.

“Though we do not dismiss the potential for the Trump administration to raise tariff rates on some countries where trade talks may have stalled, we do not expect the overall effective tariff rate—currently around 15%—to surge back up to ‘Liberation Day’ levels north of 20%,” the analysts wrote in a note.

“Treasury Secretary Bessent’s recent comments on the state of trade negotiations suggested positive momentum on balance, as did the Senate’s removal of the Section 899 ‘revenge tax’ provision from the ‘One Big Beautiful Bill Act’ that was passed by the House last Thursday.”

Still, Deutsche Bank cautioned that some countries may be targeted more aggressively than others.

“Trump (and other administration officials) have noted issues with the direction of some trade negotiations of late—in particular, with Japan and Canada—hence, we would not be surprised for some punitive tariff actions to be taken with the goal of prodding talks in the direction that they desire,” they wrote.

Trump’s unpredictable approach could result in even higher tariffs than initially expected, according to XTB research director Kathleen Brooks. 

“While Trump said that most countries would then be covered, the top rate of tariffs might be higher than what he set out on ‘Liberation Day’ on 2nd April,” Brooks said.

“The President said that a ‘couple’ of deals could be announced, but that his ‘inclination’ is to send letters out. This suggests that at this late stage, he is willing to play hardball rather than negotiate.”

She noted some expectation of a trade deal with India ahead of the July 9 deadline but flagged uncertainty around other key partners.

“It seems unlikely that Japan will get a deal, and the silence around an EU deal is also weighing on investor sentiment.”

Inflations fears

Swissquote Bank’s Ipek Ozkardeskaya warned that the tariff blitz could have unintended macroeconomic consequences, specifically fueling US inflation.

“But this time, it’s not wage pressures that threaten to reignite US inflation—it’s tariffs,” Ozkardeskaya said.

She pointed to this week’s US-Vietnam agreement as a preview of what’s to come. The deal includes a 20% tariff on Vietnamese goods and a 40% tariff if those goods are found to be transshipped from other countries.

“These higher tariffs are expected to be inflationary, unless companies choose to absorb the costs—a strategy some may adopt to protect market share, but likely not a sustainable one,” Ozkardeskaya said.

“Realistically, Trump is redrawing global trade dynamics, and they are likely to add upward pressure on US inflation.”