
CNBC Daily Open: The 15% tariff rate on Japan can feel like a relief only because of hefty ones before
Here's how it works. Let's say we're shopping for a smartphone manufactured by Dapple, which has just released two new models: a $1,200 model with a big screen and a $900 one that is more compact. The more expensive smartphone will serve as the "anchor" by which we make comparisons, so the $900 model will appear to be value for money — even if it is costly in absolute terms. But we're likely to feel good about choosing it because we've "saved" $300 on our purchase.
This scenario seems to be what's happening with the U.S-Japan trade agreement freshly announced late Tuesday stateside. U.S. President Donald Trump said Washington would gain access to Japan's markets for rice and cars — which had been sticking points during negotiations — while the latter would pay 15% tariffs on its exports to America.
At first glance, that doesn't sound too positive for Japan. But, in comparison with the 25% tariff Trump slapped on Tokyo earlier this month, it's a big improvement. As Brian Jacobsen, chief economist at Annex Wealth Management, said, "It's a sign of the times that markets would cheer 15% tariffs. A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief." That, in essence, is the anchoring effect at play.
Trump announces 'massive' trade deal with Japan. Under the agreement, Japan's exports to the U.S. will face a 15% tariff, and the country will "open" its market for cars and rice, Trump said. Japan will reportedly pay 15% tariffs on autos, lower than the universal 25% the U.S. imposed on cars built outside the country.
Tariff suspension with China likely to be extended. The U.S. and China's 90-day tariff pause expires on Aug. 12. However, U.S. Treasury Secretary Scott Bessent said the U.S. will be "working out what is likely an extension."
Bessent says Jerome Powell doesn't need to resign. However, Bessent reiterated his call for the Fed Chair to conduct an internal review of the central bank. On the flipside, Mohamed El-Erian, chief economic advisor at Allianz, called on Powell to step down.
The S&P 500 ticks up to a fresh record. That's the index's 11th record close in 2025. The Dow Jones Industrial Average rose 0.4%, but the Nasdaq Composite lost 0.39% as chip stocks slipped. The Stoxx Europe 600 fell 0.41%, led by a sell-off in defense stocks.
[PRO] Goldman Sachs is getting worried over the U.S. economy. Economists at the investment bank expect growth to slow, real income to "drag" and inflation to heat up in 2025 — all of which will raise the firm's projected recession risk.
How Europe's 'trade bazooka' could be a last resort against Trump's tariffs
The European Union appears to be considering whether to deploy its "Anti-Coercion Instrument" — characterized as a "nuclear option" to try to deter trade disputes — as the threat of a 30% tariff on EU imports looms large.
The measures could see the EU restrict U.S. suppliers' access to the EU market, excluding them from participation in public tenders in the bloc, as well as putting export and import restrictions on goods and services, and limits on foreign direct investment in the region.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
18 minutes ago
- Yahoo
Toyota to Build EVs in Czech Republic by 2028
Toyota (NYSE:TM) will start building electric vehicles in Europe at a new Czech plant by 2028. It plans to churn out about 100K EVs a year at its Czech subsidiary, including a new electric SUV. The automaker wants to launch 14 battery?electric models across Europe by 2026 from a revamped C?HR+ SUV to an updated bZ4Xand hit carbon neutrality in the region by 2035. Right now, EVs account for under 2% of Toyota's global sales, so local assembly is a big shift in strategy. Warning! GuruFocus has detected 3 Warning Sign with TM. Through June, EU registrations for battery?electric cars topped 869,271 units, or 15.6% of the market. Germany led with a 35.1% surge, Belgium was up 19.5% and the Netherlands rose 6.1%, while France dipped 6.4%. Making cars in Europe could help Toyota cut logistics costs, sidestep import duties and respond faster as legacy brands and startups ramp up EV offerings. European?built EVs position Toyota to capture market share in the continent's fastest?growing segment and protect margins. Investors will look to Toyota's roll?out of 14 EV models by 2026 and the first Czech?built units in 2028 for clues on capital spending and profit impact. This article first appeared on GuruFocus.
Yahoo
18 minutes ago
- Yahoo
Meta Faces Italy Probe Over WhatsApp AI
Meta Platforms (NASDAQ:META) sees Italy's antitrust watchdog taking a hard look at its AI?WhatsApp tie?up. Ask Italy's Competition Authority and you'll learn it opened a probe into bundling Meta AI within WhatsApp without users asking for it. Warning! GuruFocus has detected 5 Warning Sign with META. Working with the Special Antitrust Unit of the Italian Financial Police, AGCM even inspected Facebook Italy's offices last week. The regulator warns that forcing AI into a familiar chat app risks trapping users in services they didn't choose. Meta insists it's simply giving millions of Italians free access to AI where they already spend time, and says it's fully cooperating with investigators. Regulators aren't convinced. They fear that as Meta AI learns from chats and grows more useful, users will become dependentand competitors will be squeezed out. Under EU rules, fines could reach 10% of Meta's global turnover if the probe finds antitrust breaches. This investigation highlights Europe's tougher stance on default AI integrations and could force Big Tech to unbundle or face heavy penalties. Investors will be watching AGCM's findings through year?end as the outcome may set a precedent for AI bundling across the EU. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Yahoo
18 minutes ago
- Yahoo
Google Signs EU AI Code Amid Concerns
Alphabet (NASDAQ:GOOG) agrees to sign the EU's voluntary General Purpose AI Code of Practice despite warning it could slow model rollouts. In a Wednesday blog post, Kent Walker said Google will join U.S. model providers in adopting the Code to align with the AI Act's risk?based framework. Warning! GuruFocus has detected 5 Warning Sign with META. He argued Europe could see an 8% GDP lift, about 1.4 trillion annually by 2034 if AI tools are deployed securely. Walker also cautioned that departures from EU copyright law or steps that slow approvals could chill home?grown innovation. That stance comes as about 45 organizations, joined by Meta Platforms (NASDAQ:META), have asked the European Commission to delay the AI Act by two years, saying parts go far beyond the scope of the regulation. The voluntary Code mandates copyright protections, transparency documentation and risk assessments for advanced models, and some rules kick in next month. Europe's tougher approach could force Big Tech to balance innovation with safeguards and may reshape AI competition across the continent. Investors will be watching next month's Code rollout and the broader AI Act timetable for signs of compliance costs and regional competitiveness. This article first appeared on GuruFocus.