Donald Trump isn’t bluffing. After walking out of the G7 summit in Italy, the former president made it clear he’s ready to slap tariffs back on U.S. allies unless trade talks show real movement—and soon.
Aboard Air Force One, Trump criticized both European Union and Japanese negotiators, saying they’re dragging their feet. “They’re either going to make a good deal or they’ll just pay whatever we say they have to pay,” he told reporters, according to Reuters. Japan, he said, is being “tough,” and he floated the idea of sending a bill outlining what they “have to pay” to continue doing business with the U.S.
This isn’t new rhetoric from Trump, but the timing matters. The current pause on his “reciprocal tariffs” policy—essentially a hold on new import taxes—expires in early July. Trump’s tone suggests that, barring concessions, the pause is over.
EU Offer Seen As Weak
The EU has reportedly offered a flat 10% tariff on exports to the U.S., hoping to avoid steeper penalties on goods like autos and steel. That’s far from a done deal. As reported by Business Insider, Trump’s team doesn’t see it as enough.
The thinking in Trumpworld: Europe’s had a trade surplus with the U.S. for decades. A flat tariff might level part of the playing field, but it doesn’t undo years of what Trump calls “bad deals.” If there’s no breakthrough by the July deadline, tariffs on industrial goods and autos are likely to return—possibly higher than before.
Japan’s Tightrope
Japan is in a tougher spot. Prime Minister Shigeru Ishiba, under political pressure at home, is urging Trump to back off on auto tariffs. Japan’s economy is sluggish, and auto exports are a key pillar. Tariffs there could ripple across supply chains, hitting U.S. plants that rely on Japanese components.
At the G7, Ishiba met privately with Trump, trying to hold the line. But according to Reuters, Trump didn’t budge. His stance: Japan needs the U.S. market more than the U.S. needs Japan.
With domestic elections looming, Ishiba’s government may be forced to offer deeper concessions just to preserve economic stability. Behind closed doors, Japanese officials are reportedly drafting a revised deal. Time is short.
Pharma Tariffs May Be First Domino
There’s another lever Trump is eyeing: pharmaceuticals. He’s repeatedly said the U.S. is too reliant on foreign drug manufacturing—a message that lands well with both economic nationalists and swing-state voters. Now, tariffs on imported drugs could be the next shoe to drop.
There’s no formal policy yet, but the signals are clear. Trump wants to bring drug manufacturing back to U.S. soil, and he’s willing to disrupt supply chains to do it. Critics warn it could raise prices. Trump’s team thinks the political upside outweighs the market risk.
Defense and Dollars
In a side note that may become central, Trump also claimed Canada has agreed to fund part of his “Golden Dome” missile shield—a proposed North American version of Israel’s Iron Dome system. It’s not yet clear how serious or structured this agreement is, but the comment highlights how Trump is bundling trade, defense, and foreign policy into one transactional package.
This is classic Trump: If you want U.S. protection, pay up—either in defense dollars or trade terms.
Market Read: Prepare for Tariffs
Markets aren’t rattled yet, but they’re watching. If Trump pulls the trigger in July, expect renewed volatility in the auto, pharma, and manufacturing sectors. Some multinationals are already modeling tariff scenarios into Q3 earnings projections, bracing for impact.
The wildcard is whether the EU or Japan can give Trump enough of a headline win—something he can sell politically—without undermining their own economic interests. Right now, neither side seems willing to blink.
But July’s coming fast. And Trump, like it or not, holds the pen.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
