logo
Investors head into Trump tariff deadline benumbed and blase

Investors head into Trump tariff deadline benumbed and blase

And they are not overly concerned.
'The market has gotten much more comfortable, more sanguine, when it comes to tariff news,' said Jeff Blazek, co-chief investment officer of multi-asset at Neuberger Berman in New York.
'The markets think that there is enough 'squishiness' in the deadlines – absent any major surprise – to not be too unsettled by more tariff news and believe that the worst-case scenarios are off the table now.'
Both the tariff levels and effective dates have become moving targets. Trump said on Friday that tariffs ranging up to 70% could go into effect on August 1, levels far higher than the 10%-50% range he announced in April.
So far, the U.S. administration has a limited deal with Britain and an in-principle agreement with Vietnam.
Deals that had been anticipated with India and Japan have failed to materialize, and there have been setbacks in talks with the European Union.
World stocks are meanwhile at record highs, up 11% since April 2. They fell 14% in three trading sessions after that announcement but have since rallied 24%.
"If Liberation Day was the earthquake, the tariff letters will be the aftershocks. They won't quite have the same impact on markets even if they are higher than the earlier 10%," said Rong Ren Goh, a portfolio manager in the fixed income team at Eastspring Investments in Singapore.
"This financial system is so inundated with liquidity that it is hard to cash up or delever at the risk of lagging the markets, with April serving as a painful reminder for many who derisked and were then forced to chase the relentless recovery in the subsequent weeks."
Investors have also been distracted by weeks of wrangling in Congress over Trump's massive tax and spending package, which he signed into law on Friday.
Stock markets have celebrated the passage of the bill, which makes Trump's 2017 tax cuts permanent, while bond investors are wary the measures could add more than $3 trillion to the nation's $36.2 trillion debt.
The S&P 500 and Nasdaq indexes closed at record highs on Friday, notching a third week of gains. Europe's STOXX 600 benchmark is up 9% in three months.
But the risks of tariff-related inflation have weighed on U.S.
Treasuries and the dollar, and jostled expectations for Federal Reserve policy. Rate futures show traders no longer expect a Fed rate cut this month and are pricing in a total of just two quarter-point reductions by year-end.
The dollar has suffered a knock to its haven reputation from the dithering on tariffs. The dollar index, which reflects the U.S. currency's performance against a basket of six others, has had its worst first half of the year since 1973, declining some 11%. It has fallen by 6.6% since April 2 alone.
"The markets are discounting a return to tariff levels of 35%, 40% or higher, and anticipating an across-the-board level of 10% or so,' said John Pantekidis, chief investment officer at TwinFocus in Boston.
Pantekidis is cautiously optimistic about the outlook for U.S. stocks this year, but the one variable he is watching closely is interest rate levels.
For now he expects to see interest rates dip in the second half, 'but if the bond market worries about the impact of the bill and rates go up, that's a different scenario.'
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Trump threatens key US allies Japan and South Korea with 25% tariffs
Trump threatens key US allies Japan and South Korea with 25% tariffs

LeMonde

time2 hours ago

  • LeMonde

Trump threatens key US allies Japan and South Korea with 25% tariffs

President Donald Trump threatened Japan and South Korea with 25% tariffs on Monday, July 7, stepping up pressure on the two historical US allies and a dozen other economies to reach trade deals with Washington. He also issued similar letters to South Africa, Malaysia, Myanmar, Laos and Kazakhstan, saying he would slap duties on their products ranging from 25% to 40%. Trump had said at the weekend that starting from Monday he would send a first batch of up to 15 letters to countries, informing them that he would reimpose harsh levies earlier postponed in April. In near-identically worded letters to the Japanese and South Korean leaders, Trump said the tariff hikes would apply from August 1 because their trading relationships with Washington were "unfortunately, far from Reciprocal." Trump warned the countries, both key US allies in East Asia, of an escalation if they responded to the duties. Currently, both countries have been hit with a 10% levy imposed on almost all US trading partners. But Trump said he was ready to lower the new levels if Japan and South Korea changed their trade policies: "We will, perhaps, consider an adjustment to this letter." Japan's Prime Minister Shigeru Ishiba said Sunday that he "won't easily compromise" in trade talks with Washington. White House Press Secretary Karoline Leavitt told reporters Monday that Trump would sign an order later in the day to delay his July 9 deadline for steeper tariffs to take effect − postponing their imposition to August 1. She added that besides Japan and South Korea, there would be approximately 12 other partners receiving letters from Trump soon. With the deadline extension, Leavitt said Trump would be setting out the "reciprocal tariff rate" for economies in the coming month as negotiations continue. 'Several announcements in the next 48 hours' Trump originally announced sweeping tariffs on world economies on what he called "Liberation Day" on April 2, claiming the United States was being "ripped off." Amid market turmoil, Trump then suspended the initial tariffs for 90 days, a deadline that would have expired Wednesday without the latest extension. While the Trump administration had signaled hopes of striking dozens of deals by July − at one point boasting of "90 deals in 90 days" − there have been limited results so far. Washington has unveiled pacts with only Britain and Vietnam, while the United States and China agreed to temporarily lower tariff levels on each other's products that earlier reached three-digits. Asked why Trump opted to start with South Korea, Leavitt said: "It's the President's prerogative, and those are the countries he chose." US Treasury Secretary Scott Bessent said Monday that there would be a number of deals coming up: "We are going to have several announcements in the next 48 hours." "We've had a lot of people change their tune in terms of negotiations. So my mailbox was full last night with a lot of new offers, a lot of new proposals," Bessent told CNBC. He added that he would meet with his Chinese counterpart in the coming weeks.

Trump steps up pressure for deals as US tariff deadline nears
Trump steps up pressure for deals as US tariff deadline nears

France 24

time6 hours ago

  • France 24

Trump steps up pressure for deals as US tariff deadline nears

Trump is due to send a first batch of letters to up to 15 trading partners from noon local time (1600 GMT), warning that US levies on imports will snap back to elevated levels if foreign governments fail to reach agreements with Washington. The duties will not bounce back until August 1, Treasury Secretary Scott Bessent said over the weekend, a move that appears to give more room for dealmaking. Trump imposed a 10 percent tariff on imports from almost all trading partners in early April, but some economies including the European Union were slated to have this rate increase further. As markets plunged at the time, Trump halted the steeper levies to allow for talks. That pause expires on Wednesday. "We are going to have several announcements in the next 48 hours," Bessent told CNBC in an interview Monday. "We've had a lot of people change their tune in terms of negotiations. So my mailbox was full last night with a lot of new offers, a lot of new proposals," Bessent said. He reiterated that higher tariff rates for countries would not return until August 1. There was no immediate response from the White House on whether Trump would formally extend the Wednesday deadline. Asked about the letters Trump plans to send out, Bessent said these would inform partners of the tariff rate their products face when trading with the United States, unless they want to "come back and try to negotiate." Limited results? While the Trump administration has signaled hopes of striking dozens of deals by early July, there have been limited results so far. Washington has unveiled pacts only with Britain and Vietnam, while the United States and China agreed to temporarily lower tariff levels on each other's products that earlier reached three-digits. Bessent told CNBC Monday that he would "be meeting with my Chinese counterpart sometime in the next couple of weeks." The two sides have so far held high-level talks in Geneva and London. But Washington and Beijing's pause on tit-for-tat tariffs is due to expire in mid-August. On whether he was disappointed in the number of trade deals achieved so far, Trump's trade adviser Peter Navarro maintained that he is "happy with the progress we've had." "Every country that we run a major deficit with is fully engaged," he told CNBC on Monday. On Sunday night, Trump wrote on his Truth Social platform that Washington would deliver "tariff letters" or deals to various countries on Monday. In a separate post that night, Trump threatened another 10 percent tariff on countries aligning themselves with the emerging BRICS nations, accusing them of "Anti-American policies" after they slammed his duties at a summit. For now, partners are still rushing to avert Trump's tariffs altogether. The European Commission said that EU chief Ursula von der Leyen had a "good exchange" with Trump on trade when the pair spoke Sunday. Japan's Prime Minister Shigeru Ishiba, however, said Sunday that he "won't easily compromise" in trade talks with Washington.

BRICS' criticism brings Trump 10% tariff threat
BRICS' criticism brings Trump 10% tariff threat

France 24

time8 hours ago

  • France 24

BRICS' criticism brings Trump 10% tariff threat

The 11-nation grouping -- which also includes US allies Brazil, Saudi Arabia, and Indonesia -- is concluding a two-day summit in Rio de Janeiro. On Sunday, BRICS leaders described Trump's stop-start tariff wars as "indiscriminate", damaging, and illegal, drawing a quick rebuke from the pugilistic US president. "Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy," Trump wrote on social media. BRICS members account for about half the world's population and 40 percent of global economic output. Conceived two decades ago as a forum for fast-growing economies, the BRICS have come to be seen as a Chinese-driven counterbalance to US influence. But it is an expanding and often divergent grouping -- bringing together arch US foes like Iran and Russia, with some of Washington's closest allies in Latin America, the Middle East, Africa, and Asia. Some US allies inside the bloc had tried to blunt criticism by not mentioning Trump by name in their summit statement. Saudi Arabia -- one of the world's biggest purchasers of US high-tech weapons -- even kept its foreign minister away from Sunday's talks and a BRICS "family photo" of leaders, seemingly to avoid Washington's ire. But such diplomatic gestures were lost on the US president. In April, Trump threatened a slew of punitive duties, before backing off in the face of a fierce market sell-off. Now he is threatening to impose unilateral levies on trading partners unless they reach "deals" by August 1, with BRICS nations seemingly getting higher tariffs than planned. It cannot have helped that BRICS leaders also condemned the recent US and Israeli bombing of Iran's nuclear facilities -- a show of solidarity with fellow member Iran. Beijing on Monday insisted BRICS was not seeking confrontation with the United States. "China has repeatedly stated its position that trade and tariff wars have no winners and protectionism offers no way forward," foreign ministry spokeswoman Mao Ning said. Beijing also defended the bloc as "an important platform for cooperation between emerging markets and developing countries". "It advocates openness, inclusivity, and win-win cooperation," Mao said. "It does not engage in camp confrontation and is not targeted at any country," she said. The political punch of this year's summit has been depleted by the absence of China's Xi Jinping, who skipped the meeting for the first time in his 12 years as president. The Chinese leader is not the only notable absentee. Russian President Vladimir Putin, charged with war crimes in Ukraine, also opted to stay away, participating via video link. He told counterparts that BRICS had become a key player in global governance. © 2025 AFP

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store