President Trump on Tuesday suggested that his team would force Japan to accept higher tariffs of "30%, 35%, or whatever the number is that we determine." Notably, that proposal is higher than the 24% "Liberation Day" level and the current baseline 10% tariffs in place while the two sides negotiate.

“I’m not sure we’re going to make a deal," Trump said. "I doubt it with Japan. They’re very tough. You have to understand, they’re very spoiled."

Trump's tariff hike threat on Japan is a worst-case scenario for Tokyo. And if Trump follows through, experts believe Japan will have no choice but to respond.

“There is some risk of a US tantrum that results in higher punitive actions by Washington this month,” said Kurt Tong, a former senior US diplomat in Asia who’s now a managing partner at the Asia Group. “If that happens, Japan may have no choice but to hit back with its own specific countermeasures.”
With Japan as his jumping-off point, Trump renewed threats that he may stick to his self-imposed July 9 deadline for making trade deals and issue new tariff levels to trading partners, forgoing another pause to "Liberation Day" duties.

"No, I'm not thinking about the pause," Trump said aboard Air Force One when asked if he would extend the tariff pause, per Bloomberg. "I’ll be writing letters to a lot of countries."

The president's comments come after a Financial Times report Tuesday suggested that Trump's team is aiming for smaller, quick agreements before July 9, when Trump plans to bring back his toughest tariffs.
Top administration officials have been providing mixed signals on the malleability of the July 9 deadline while countries race to finalize talks. But on Monday, Treasury Secretary Scott Bessent had warned that "recalcitrant" countries would face a return of steep "Liberation Day" tariffs.

Meanwhile, the European Union has signaled it was willing to accept a 10% universal tariff on many of its exports but is seeking exemptions for pharmaceuticals, alcohol, semiconductors, and commercial aircraft as part of a trade deal, Bloomberg reported.

On the North American front, Canada has scrapped its digital services tax that was set to affect large US technology companies. The White House said trade talks between the two countries had resumed after Trump threatened to cut off trade talks.