CNBC Daily Open: Trump's proposed EU tariffs didn't seem to worry investors much
If U.S. President Donald Trump follows up on his threat of 50% tariffs on the European Union, he'd be imposing higher duties on America's ally compared with the 30% on China currently.
But on Sunday, Trump said he would delay tariffs on EU to July 9 from June 1 following a call with European Commission President Ursula von der Leyen.
Indeed, when news of the tariffs first broke, analysts weren't convinced Trump's statement held much weight. For one, the U.S. President used the word "recommendation" — a proposal rather than a clear directive. Trump has also walked back on more than one occasion with regard to import duties: pausing the "reciprocal" tariffs and lowering trade barriers with China, albeit both on a temporary basis.
Major U.S. and European stock indexes did not have a sharp reaction compared with Trump's initial announcement of tariffs on April 2, signaling that investors are beginning to take tariff-related announcements with a pinch of salt.
The proposal of 50% tariff on the EU is primarily a "negotiating tactic," Barclays wrote in a Friday note.
Still, markets dropped on the week — the S&P 500, Dow Jones Industrial Index and Nasdaq Composite lost more than 2% during that period — as Treasury yields jumped. The sell-off in Treasurys came on the back of Trump's tax bill, which is estimated to add $2.3 trillion to the federal deficit.
So, while investors appear to be coming to terms with Trump's tariffs proclamations, there's much more in the president's arsenal to keep markets jittery.
Trump recommends 50% tariffs on EUU.S. President Donald Trump said Sunday he will delay 50% tariffs on the European Union until July 9, days after "recommending" them to kick in from June 1. Trade freight experts said that such tariffs could "backfire" on the U.S. and make manufacturing more expensive. The White House did not interpret the president's post as a formal statement of policy, CNBC's Eamon Javers reported.
U.S. markets dropped — slightly U.S. stocks dropped Friday on Trump's tariff threats. The S&P 500 retreated 0.67%, the Dow Jones Industrial Average lost 0.61% and the Nasdaq Composite slid 1%. Those moves, however, are much smaller than the plunges of more than 4% on April 4, after Trump announced his "reciprocal tariffs." Asia-Pacific markets were mixed Monday. At 2 p.m. Singapore time, Japan's Nikkei 225 was up nearly 1% as shares of Nippon Steel added 2.2% following news that Trump had approved a merger between the company and U.S. Steel.
Staying ahead despite export curbsStockpiling chips, making artificial intelligence models more efficient and using homegrown semiconductors — those are some strategies Chinese technology companies Tencent and Baidu are using to keep up in the global AI race even as the U.S. tightens exports of crucial chips. Nvidia CEO Jensen Huang on Wednesday called the curbs a "failure," saying they are doing more damage to American businesses than to China.
Xiaomi's car challenges Tesla'sLess than a year after launching its first electric car, Xiaomi revealed its YU7 SUV late on Thursday. The company claimed it would have a driving range of at least 760 kilometers (472 miles) on a single charge, taking aim at the Tesla's extended-range Model Y, which advertises a range of 719 km. "We expect Yu7 would significantly erode Tesla Model-Y's China market share," Citi analyst Jeff Chung said in a report Sunday.
[PRO] Nvidia earnings to determine marketsNvidia announces first-quarter earnings this week. The Wednesday event — alongside comments Trump seemingly shoots from the hip — will determine investor sentiment of markets for the week. Keep an eye out also for the U.S. personal consumption expenditures index for April for signs of how tariffs are affecting the prices households pay for goods and services.
Businesses are finding a workaround for tariffs — and it's entirely legal
A decades-old piece of U.S. legislation known as the "first sale rule" allows U.S. importers to use the price of the first sale in a number of transactions to calculate customs duties.
For instance, a Chinese manufacturer sells a T-shirt to a Hong Kong vendor for $5. That Hong Kong vendor sells it to a U.S. retailer for $10. That U.S. retailer then sells the T-shirt to consumers for $40.
Under the first sale rule, the U.S. retailer can pay the import duty on the initial $5 price of the good, rather than the vendor's inflated $10, thus stripping out the cost associated with the middleman's profit.
Companies appear to be leveraging that customs law. While the first sale rule is broadly applicable across products and industries, it is considered particularly useful in higher-value consumer goods and luxury products, where margins are greater.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Black America Web
32 minutes ago
- Black America Web
Poll Shows Companies Maintaing DEI Intiatives Have Better Reputations
Source: Cheng Xin / Getty In news surprising to absolutely no one, it turns out companies that have walked back their diversity, equity, and inclusion (DEI) initiative have suffered measurable reputational damage with consumers. According to a poll conducted by Axios, companies that maintained their DEI policies saw their reputational scores actually increase. The scores are based on metrics that measure 'trust, culture, ethics, citizenship, vision, growth, and products and services.' Of the 100 companies centered in the poll, there was an average reputation decline of 2.34 points. A common trait shared by the companies that received these declines is that they walked back their commitments to DEI initiatives. The majority of these withdrawals came as a result of the Trump administration's ongoing assault against anything it sees as DEI. Yet notably, companies such as Costco and Microsoft, which have held their ground on their DEI commitments, saw their reputations increase at an average of 1.5 points. These results come as a recent Pew Research poll shows that the majority of Americans still believe DEI initiatives are good for the workplace. As I said in the headline, this news really isn't that surprising if you've been paying even the slightest amount of attention over the last several months. Target has really committed itself to being a corporate lolcow this year, as its steps to wind back its DEI initiatives have blown up spectacularly in its face. In fact, let's speed run through how bad this has gone for Target. Almost as soon as the company announced it would be rolling back its DEI initiatives, consumer boycotts began in earnest. Initially, there was anecdotal evidence of their effect as foot traffic had been noticeably down in Target stores in the weeks following the boycotts. The impact was so bad that the company reached out to Rev. Al Sharpton to help figure out how they could rebuild trust with the Black community. Source: picture alliance / Getty Target's 2025 woes were compounded during an earnings call in late May, where they revealed a 2.8 percent decrease in sales in the wake of the boycotts. This didn't help the continuous decline of Target's stock price, with shares dropping 3.5 percent after they revealed the sales dip. Target was one of the companies included in Axios' poll, and its reputation went down by five percentage points and was listed in the bottom 25 percent when it came to ethics. Meanwhile, Costco's been out here big stepping with that 'I ball too hard, my girl too bad, my money too tall'-type energy. Shareholders overwhelmingly voted to keep their current DEI measures intact, and consumers seem to have noticed. Last week, Costco revealed that its earnings and revenue increased eight percent over the last quarter. Just speaking for myself and my family, the money that we would usually spend on a Target run has instead been redirected to Big Kirkland, and I wouldn't be surprised if that was true of many Black households throughout the country. Target's ongoing woes have proved to be a warning sign for a significant number of American retailers. Companies such as Walmart and Home Depot listed consumer boycotts as a potential risk in their annual regulatory filings. The numbers don't lie; withdrawing from DEI initiatives has proven to be a bad business. Here's hoping American companies finally take the hint (they won't, though, let's be real). SEE ALSO: They Scared: Target, Walmart Warn Investors About Consumer Boycotts Affinity Graduations Canceled Amid Trump's DEI Crackdown Surprise! Poll Shows Companies Maintaing DEI Intiatives Have Better Reputations was originally published on
Yahoo
33 minutes ago
- Yahoo
ECB expected to cut rates again as Trump trade war rumbles on
The European Central Bank is expected to deliver its seventh-straight interest rate cut this week as US President Donald Trump's volatile trade policies add to headwinds for the sluggish eurozone. Even before Trump unleashed his on-off tariff onslaught on the world, the ECB had been bringing borrowing costs down as inflation eased. Worries about sluggish performance in the 20 countries that use the euro have increasingly overshadowed inflation concerns as higher rates have pinched businesses and households. Trump's tariffs have added to the sense of urgency. Europe is in the president's crosshairs over its hefty surplus in traded goods with United States, stoking fears about a heavy hit to the continent's exporters. Predicting a cut when the ECB's governing council meets Thursday, HSBC said the eurozone's "near-term outlook has deteriorated on the recent US tariffs announcements and related uncertainty". Analysts expect another quarter-point reduction that would take the Frankfurt-based institution's key deposit rate to two percent. But observers believe the June cut could be the final one in the current streak, with the ECB likely to pause at its next meeting in July to take stock of the latest economic developments. The ECB's series of cuts stands in contrast to the US Federal Reserve, which has kept rates on hold recently amid fears that Trump's levies could stoke inflation. - Global order 'fracturing' - Trump has already hit the EU with multiple waves of tariffs -- it currently faces a 10-percent "baseline" levy as well as 25-percent duties on cars, steel and aluminium. He has paused even higher rates on the EU and other trading partners to allow for talks, momentarily easing some of the tensions that had roiled global markets. But in a sign the trade war may be far from over, he threatened last month to swiftly impose a 50-percent tariff on the EU -- only to delay the move a few days later to July 9. Highlighting the alarm felt in Europe, ECB President Christine Lagarde said last week that the global economic order backed by US leadership was "fracturing". "Multilateral cooperation is being replaced by zero-sum thinking and bilateral power plays," she said in a speech in Berlin. But the ECB faces a tricky task in protecting the eurozone from the mercurial US president's trade policies while keeping inflation stable. Euro-area inflation was 2.2 percent in April, slightly above the ECB's two-percent target and higher than expected. May's inflation estimate will be published by Eurostat on Tuesday ahead of the ECB meeting. But most recent signs suggest price pressures are easing faster than previously thought, and the ECB is expected to cut its inflation predictions when it releases its own new economic forecasts Thursday. - Downward pressure - Most analysts expect Trump's tariffs to add to downward pressure on eurozone inflation, particularly as it might lead China -- facing the highest US levies -- to redirect inexpensive manufactured goods to Europe. The ECB is expected to cut its growth estimates Thursday due to the impact of the trade war, after the EU slashed its forecasts last month. While investors will be on the lookout for any clues from Lagarde about the ECB's next move, analysts warn that heightened uncertainty means she will give little away. The meeting will likely also produce questions over the future next moves for Lagarde. The former head of the World Economic Forum Klaus Schwab told The Financial Times last week that he had spoken with Lagarde about her taking over as head of the organisation. The ECB brushed away the rumours, saying Lagarde was "determined" to see out her term at the helm of the central bank. sr/sea/rmb/dhw
Black America Web
33 minutes ago
- Black America Web
Pardon For Pay: Will Diddy Be The Next Celebrity Pardoned By Trump?
Source: Johnny Nunez / Getty As Donald Trump continues his second term with a controversial string of presidential pardons, the former reality star turned commander-in-chief is now entertaining the idea of possibly granting clemency to embattled hip-hop mogul Sean 'Diddy' Combs. During a recent press conference, Trump was asked whether he would consider pardoning Combs, who is currently on trial in New York facing charges that include sex trafficking, racketeering, and coercion. The former president didn't say no; instead, he left the door wide open. 'First of all, I'd look at what's happening. And I haven't been watching it too closely,' Trump admitted. 'But I know people are thinking about it. I think some people have been very close to asking.' Combs, who has pleaded not guilty to the charges, is currently standing trial after a string of civil lawsuits and a federal indictment painted him as the alleged leader of a violent criminal enterprise; he faces a potential life sentence if convicted on the most serious counts. The charges stem in part from a 2023 civil suit filed by his former partner, singer Cassie Ventura, which alleged years of physical and sexual abuse. Though that lawsuit was quickly settled, it opened a floodgate of accusations from multiple women, prompting a federal investigation. Then, in May 2024, damning security footage surfaced showing Combs attacking Ventura in a hotel hallway in 2016. The graphic footage led to Combs issuing an apology, calling his actions 'inexcusable,' though he continues to deny all allegations of sexual assault. Still, Trump seems unbothered by the optics of even floating the idea of a pardon in a case so widely publicized and emotionally charged. 'Whether they like me or don't like me, it wouldn't have any impact,' he said. 'If I think somebody was mistreated, I would look at the facts.' Source: Ron Galella / Getty Trump's comments reignited debate around the use—and abuse—of presidential pardon power. In the first months of his second term, Trump has issued dozens of pardons, including clemency for reality TV personalities Todd and Julie Chrisley, rapper NBA YoungBoy, and a blanket pardon for all January 6th rioters. His track record for celebrity-centric or politically charged pardons has sparked concern about how presidential clemency is being leveraged for personal narratives, culture war fodder, or social media applause. Trump's musings on Diddy's legal future also rekindled public memory of their past relationship. The two were once seen at high-profile events together, including a 2005 gala at Mar-a-Lago and a 2008 U.N. fundraiser. 'He used to really like me a lot,' Trump noted, before implying that their relationship soured after he entered politics. 'I'd read some little bit nasty statements in the paper all of a sudden.' The comments come on the heels of a recent interview with Suge Knight, former CEO of Death Row Records, who also floated the idea that Trump could be Diddy's best shot at clemency. If Trump were to act on it, the move would undoubtedly add to the long and growing list of headline-grabbing pardons that have become a hallmark of his presidential legacy. Still, this is not merely a legal or political story—it's a moral one. The question isn't just whether Trump can pardon Diddy, but whether he should. With multiple women accusing Combs of violent and coercive behavior, a pardon would not only dismiss the severity of the charges but also further erode public trust in the justice system — particularly for victims of sexual violence. And yet, in Trump's America, celebrity, proximity, and popularity often blur the lines between accountability and absolution. As Trump himself said, 'It's not a popularity contest.' But as he also made clear: 'I would certainly look at the facts.' For a president who's never shied away from turning the criminal justice system into a tool of spectacle and loyalty, it wouldn't be surprising if the facts ultimately mattered less than the headlines. The question now is: will Diddy become the next recipient of presidential mercy, serving as another reminder that in this political era, justice often comes with a price tag? SEE ALSO: Report: Elon Musk Allegedly Used Heavy Drugs While Courting Trump Thanks To Donald Trump, The American Dream Is Dead SEE ALSO Pardon For Pay: Will Diddy Be The Next Celebrity Pardoned By Trump? was originally published on Black America Web Featured Video CLOSE
