U.S. President Donald Trump ramped up pressure on key trading partners Tuesday, accusing the European Union of not offering a fair trade deal and calling Japan “tough” in negotiations. The remarks came as Trump departed early from the G7 summit in Canada, leaving his trade team behind to continue discussions.

Speaking to reporters aboard Air Force One, Trump warned that unless the EU presents “a good deal,” it would face higher tariffs. Treasury Secretary Scott Bessent, along with U.S. Trade Representative Jamieson Greer and National Economic Council Director Kevin Hassett, remained in Kananaskis, Alberta, to keep the negotiations alive.

Ironically, while Trump met informally with most G7 leaders, he didn’t engage with the heads of India, Australia, or Mexico – all of whom were scheduled to meet him during the summit. However, Mexican President Claudia Sheinbaum later tweeted about a “very good” phone conversation with Trump, in which both sides agreed to collaborate on a range of issues, a call the White House confirmed.

“We’re talking, but I still don’t feel they’re offering a fair deal,” Trump said about the EU. “They either give us a good deal or pay what we decide.”

European Commission President Ursula von der Leyen, speaking on the sidelines of the summit, acknowledged the complexity of the talks but expressed cautious optimism about reaching a deal before reciprocal tariffs kick in on July 9, following a 90-day pause.

Greta Peisch, a Washington-based trade lawyer, said Trump’s early departure was a setback for other G7 nations, as many were hoping for direct clarity from the U.S. president on potential compromises.

On Japan, Trump hinted that a deal was still possible, despite tough negotiations. “They’re tough, the Japanese are tough,” he said. “But at the end of the day, we can always send a letter saying, ‘Here’s what you’re going to pay.’”

He also reiterated a long-standing threat to impose tariffs on pharmaceutical imports, aimed at pushing drug manufacturers to bring production back to the U.S. The move is part of a Commerce Department investigation under Section 232 of the Trade Expansion Act of 1962.

On the UK front, Trump and Prime Minister Keir Starmer announced a limited trade agreement during the G7, locking in lower tariffs on British autos and removing levies on aerospace goods. However, disagreements over steel and aluminum tariffs remain unresolved.

Former U.S. official Matthew Goodman called expectations of sweeping trade deals at the summit “overly ambitious,” noting that many of the talks are likely being used as leverage ahead of the July 9 deadline when Trump’s “Liberation Day” tariffs are due to come into force. Several countries are still negotiating in hopes of avoiding them.

Trump has signaled flexibility for countries engaged in ongoing talks but warned others that they might soon receive formal tariff notices from Washington.

Japan Feels the Heat as Auto Tariffs Drag Exports Down; UK Steel Tariffs Still in Limbo Despite G7 Progress

Meanwhile, Japan recorded a trade deficit in May as exports slipped under pressure from U.S. tariffs, with auto shipments to the U.S. plunging nearly 25% year-on-year,  a direct hit from President Donald Trump’s tariff push.

According to Japan’s Finance Ministry, overall exports declined 1.7% in May from a year earlier, while imports fell a sharper 7.7%, signaling weakening domestic demand. The result: a trade deficit of 637.6 billion yen (around $4.4 billion).

At the heart of the export slump is Japan’s continued struggle to reach a breakthrough with the U.S. on auto tariffs. President Trump has imposed a 25% additional tariff on Japanese vehicles and 24% on various other imports, warning recently that those numbers could climb even higher. After talks on the sidelines of the G7 summit in Canada, Prime Minister Shigeru Ishiba acknowledged the two sides had failed to resolve key sticking points.

Japan has pushed back by reminding its long-standing role as a critical U.S. ally and major investor in the American economy. Japanese automakers like Toyota and Honda already manufacture vehicles in North America, supporting U.S. jobs, a fact Tokyo has repeatedly spoken about in negotiations.

Meanwhile, another tariff dispute remains unresolved, this time between the U.S. and the United Kingdom.

Despite fanfare around a partial trade breakthrough announced at the G7 summit, steel and aluminum tariffs remain a thorn in the side of the U.S.-UK relationship. President Trump and British Prime Minister Keir Starmer celebrated the easing of tariffs on automobiles and aerospace goods, but steel talks hit a wall.

A key concern for U.S. negotiators: the Chinese ownership of major UK steel assets, notably British Steel. The administration has flagged national security risks tied to foreign influence, pushing for stricter auditing and supply chain reviews before any exemptions under Section 232 can move forward.

Complicating matters further is Brexit. The UK, now outside the EU, no longer enjoys the bloc’s favorable trade terms with the U.S., leaving it to renegotiate agreements from scratch. Earlier this month, Britain narrowly avoided tariffs of up to 50% on some steel products, a temporary fix that could expire if no deal is signed by July 9.

Washington has proposed a quota-based exemption for UK steel and aluminum, but it hinges on the UK tightening security protocols, a requirement that continues to stall progress.

Adding to the challenge is the political backdrop. U.S. officials remain cautious over how the UK handles issues like the Northern Ireland Protocol, seeing it as a broader measure of post-Brexit reliability and Western alignment.

While the aerospace and auto sectors have notched early wins, including duty-free access for UK aircraft components and a quota of 100,000 British cars with reduced tariffs, the steel industry is still in a holding pattern.

UK Trade Secretary Jonathan Reynolds acknowledged that while trade deals move slowly, momentum is building. Still, he admitted there’s “plenty of work ahead” – particularly in ensuring favorable outcomes for steel and pharmaceuticals.

When asked if the UK is safe from future tariffs, Trump offered a characteristically blunt reassurance: “The UK is very well protected. You know why? Because I like them. That’s their ultimate protection.”

For now, both Japan and the UK are learning that goodwill alone won’t shield economies from the shifting fault lines of trade politics.

India Pushes for Tariff Stability Clause in Trade Deal with U.S.

Meanwhile, back home, as the India-U.S. Bilateral Trade Agreement (BTA) inches closer to finalisation, New Delhi is pushing for one critical assurance – no surprise tariffs once the deal is signed.

According to sources familiar with the negotiations, India wants a clear commitment from the U.S. that the Trump administration won’t impose new tariffs post-agreement, a move aimed at ensuring policy predictability and protecting key domestic sectors like leather and textiles.

“We’ve laid everything on the table,” said one official involved in the talks, adding that India is seeking tariff stability as a non-negotiable part of the package.

The U.S. had earlier announced a 26% reciprocal tariff on Indian goods starting April 2 as part of its broader global trade offensive. While the new tariffs have been paused for 90 days, until July 9, a baseline 10% tariff remains in place. Both sides are now racing to wrap up the deal before the pause ends.

India wants to ensure that any tariff structure agreed upon remains insulated from unilateral changes down the line, particularly given President Trump’s unpredictable stance on trade. To that end, officials are pressing for a formal clause that either prevents future tariff hikes or ensures compensatory mechanisms if they occur.

“India is essentially seeking a ring-fence provision,” said a senior official. “If Washington decides to revise tariffs again, the deal must allow India to pull back certain concessions.” Trade experts agree with this cautious approach. “The BTA should be time-bound, not indefinite,” said one New Delhi-based analyst. “India should absolutely insist on a clawback mechanism, a safeguard that lets it walk back benefits if the U.S. moves the goalposts.”

This comes at a time when the global economy is still digesting the ripple effects of Trump’s April 2 tariff announcement. Financial markets responded swiftly and sharply with stocks sliding, bond yields fluctuating, and the U.S. dollar jolted into volatility.

“The financial reaction was telling,” said Oleg Itskhoki, professor of economics. “You can’t isolate trade policy anymore. Tariffs now have immediate spillover into financial markets — they move currencies, shift investment flows, and unsettle investor sentiment.”

Historians point out that the last time the world saw this kind of sweeping tariff action was in the 1930s, when countries, including the U.S., tried to shield domestic jobs amid the Great Depression. Even during the 2008 financial crisis, when U.S. unemployment crossed 10%, there wasn’t a similar wave of protectionism.

But today’s context is different. Geopolitics, domestic election cycles, and shifting global alliances are all colliding and tariff policy is now as much a diplomatic weapon as it is an economic one.

The Last Bit, A World on Tariff Tenterhooks – Allies, Not Exempt

Donald Trump’s “America First” trade policy has turned the global economic stage into a high octane negotiation room, one where even allies are expected to pay their dues or play by his rules. Whether it’s Japan’s $4.4 billion trade shock, the UK’s steel deadlock, or India’s scramble to secure a tariff stability clause –  Trump is reshaping the old norms of diplomacy and trade with blunt instruments and binary ultimatums.

For countries like Japan, the UK, India, and others, it is not about tariffs alone but about sovereignty, predictability, and negotiating power in a world where alliances no longer guarantee exemptions. Deals now come with deadlines, quotas, and veiled threats, often wrapped in a handshake and unraveled with a tweet.

Trump’s game of global economic chicken – where pressure, unpredictability, and personality dominate policy – has left allies walking a tightrope. Secure a deal or risk economic penalties. Be “liked” or be levied. It’s transactional diplomacy, where the line between negotiation and coercion is as blurred as the outcomes themselves.

July 9, the day Trump’s paused tariffs may snap back into effect, the message to U.S. trading partners is sharp and blunt – no one is too close to be taxed, and no deal is ever truly done.