Trump's Tariff Threats: Markets Play the Waiting Game

Trump's Tariff Announcement

• New Tariffs: 25% to 40% on goods from 14 countries, including Japan, South Korea.
• Effective Date: August 1.
• Market Reaction:
• Asia: Japan's stock market rose slightly.
• Europe: Main stock index remained almost flat.

Market Sentiment

• Trump's Flexibility:
• Deadline not set in stone.
• Open to talks, leading to market speculation of a potential backdown.
• "TACO" Trade: Experts suggest Trump may not follow through, similar to past behavior.

Impact on Businesses and Consumers

• Uncertainty: Businesses and consumers remain in limbo.
• U.S. Tariffs: Already raised significantly since 2024, with potential for further increases.

Europe's Outlook

• Hopeful Signs: EU leaders believe a deal with the U.S. may be imminent.
• Avoiding Tariffs: Potential deal could prevent a 20% tariff on European goods.
• Stock Market Reaction: European stocks showed minimal reaction due to optimism in talks.

Expert Predictions

• Final Tariff Rates: Expected to be lower than initial threats, around 15%.
• Special Treatment: Some products may receive favorable terms.
• Uncertainty Continues: Until deals are finalized, uncertainty will persist.