US Treasury Secretary Scott Bessent announced that President Trump will notify trading partners about reinstating higher tariffs starting August 1, if no agreements are made by April 2. This will be done through formal letters. The US is close to finalizing several trade deals, with big announcements expected before the July 9 deadline when paused tariffs could return. In addition, around 100 smaller countries, many of which have not talked with the US, will receive fixed tariff rates. The original deadline of July 9 has now been extended to August 1 for more negotiations. Trump has found it tough to negotiate with over 170 countries, preferring fixed tariffs instead of lengthy discussions. He describes the strategy of announcing and then delaying tariffs as a smart negotiating tactic. These statements suggest a clear tactic by US leadership: using potential tariff hikes as leverage to push for cooperation or concessions before the deadlines. Bessent’s comments, along with the new August 1 implementation date, highlight a strategic time frame aimed at speeding up bilateral negotiations without entirely dropping them. By moving the tariff deadline from July 9 to August 1, the US is not backing down but rather allowing a bit more time for last-minute negotiations. However, the delays shouldn’t be seen as weakness. The formal notification serves as both a diplomatic alert and a legal precursor, giving partner countries and others limited time to adjust, respond, or comply based on their current situations. The fixed tariffs for around 100 countries create a scenario where cooperation is not essential but is rewarded. For those who either can’t or won’t engage in talks, the fixed rates leave no room for negotiation—there’s no reason to delay. We should pay close attention to how interest rates can shift over the next few weeks. The timeline is clear, and pricing around certain options will likely reflect a lower chance of last-minute deals, especially for countries that haven’t started discussions. As we approach the third week of July, trading volumes in long-term hedges may start to decline, particularly where risks are stabilizing. This approach of setting deadlines and firming up from the President isn’t new, but the commitment to enforce tariffs after August confirms that discussions won’t extend beyond that point. Derivatives related to customs exposure or currency fluctuations with secondary partners to the US might see more activity than direct pairs, depending on how quickly negotiations in Geneva gain momentum. Before the July deadline, we should focus more on calendar adjustments and reducing gamma loads as mid-July approaches. We’ve seen this pattern before: initial threats, a pause, and then a decisive action at expiration. Participants need to shift their attention to the decay curves of those linked to stable midpoints instead of expecting that more talks will lead to reversals. They won’t. The strategy is clear: set a timeline, then act. There are no signs of another extension. Those without exposure should stay that way.

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