WASHINGTON, D.C. – July 7: An aide announced a 25% tariff starting on August 1 in a letter signed by U.S. President Donald Trump, announcing a 25% tariff on July 7, 2025 at the Brady press conference in the White House in Washington, D.C., Washington, on July 7, 2025.
Andrew Harnik | Getty Images News | Getty Images
U.S. President Donald Trump slapped the punitive tariff rate on 14 trading partners on Monday, but global markets shrugged and got rid of new policies.
president Announced on Monday that he had sent a letter To Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos, Myanmar, Bosnia and Herzegovina, Tunisia, Indonesia, Bangladesh, Serbia, Cambodia and Thailand. Each letter lists new tariff rates for goods sent to the United States from each country.
On August 1, the new price ranges from 25% to 40%.
The Asia-Pacific market (several of which will be directly affected by the new tariffs) staged a static response on Tuesday. Japan’s benchmark Nikkei 225 The index ended 0.3% of the day, while South Korea’s kospi Obtain 1.8%.
European markets are also softened, trading Tuesday’s wide flat The first trade show since Trump announced it late Monday. Pan-European Stoxx 600 Shortly after noon in London, the index fell by 0.09%.
On Wall Street, Stock futures are At Tuesday’s trading meeting, in a loss meeting on Monday, it was largely higher.
When Trump’s initial “reciprocity tariff” announcement Causing global sales.
Return of the Taco deal
One reason may be because Trump seems to have adopted the new policy more flexibly. He told reporters on Monday that he marked the August 1 deadline as “company, but not 100% company.”
“If[the affected countries]call and they say we want to do something differently, we will be open to that,” the president said.
According to AJ Bell investment analyst Dan Coatsworth, the market is counting on Trump to back down his tariff regime.
“this ‘Tacos’ (Trump Always Chicken) Trade He returned to the table as the Trump administration’s latest announcement on tariffs provided some relief to financial markets. He said in a note Tuesday morning, adding that the latest matter eliminated the “immediate cliff edge” of the July 9 tariff deadline.
However, the update also adds a period of uncertainty over governments, companies and consumers fighting for it.
Some of the major U.S. U.S. trading partners, including the EU, India and Taiwan, have not received the letter, or will soon be received, or will soon be received, said Paul Ashworth, chief North American economist at Capital Capital Economics.
Without transactions, the effective tariff rate on U.S. imported goods will rise from 15.5% to 17.3%. At the end of 2024, it was 2.5%.
“Given the impact of tariffs so far on U.S. consumer prices, and the revenue from tariffs is being recycled due to tax revenues The giant Republican Congress has just passed, and the consequences should be manageable. ” he said.
European trade agreement is optimistic
In Europe, the hybrid reactions generated by stocks may also be attributed to confidence that an EU trade deal will be reached, thus avoiding the 20% tariff rate the White House plans to impose on the group’s goods.
An EU diplomat told CNBC on Monday that the EU could receive a letter from Trump later this week, giving the group more time to get a framework deal with the White House. This broad agreement may include a 10% benchmark tariff and may see exceptions given to certain commodities such as aircraft and spirits. However, the diplomat admitted that it “is ultimately up to Trump.”
Too Widely reported European Commission President Ursula von der Leyen had a “good exchange” with Trump over the weekend.
Kiran Ganesh, a multi-asset chief asset strategist at UBS Global Wealth Management’s General Investment Office, told CNBC Tuesday morning that the EU has not received a letter, possibly because the deal is tight and reassuring investors.
“Overall, the market is generally happy with the idea that tariffs may reach current efficiency (15%), although there may be lower national-level tariffs and more sector-level (semi-finals, pharmaceuticals, minerals) tariffs,” Ganesh said in an email.
“So, overall, nothing in the letter can change the market’s perception of when tariffs will end up or the road we get there (threats and negotiations).
Toni Meadows, head of investment at BRI Wealth Management in London, said investors have already priced that many trade deals will not be reached before the July deadline, but he suggested some investors may be complacent.
“A comprehensive trade agreement can be negotiated for months or even years, so the market does not believe that 90 partial transactions within 90 days are possible,” he told CNBC in an email.
“At the moment, investors seem comfortable riding Trump’s SeeSaw towards policymaking, but reciprocal tariffs are taxes on activities, and it’s too early to judge the actual impact on the economy. If we start to see a direct link to economic volume, maybe things will change.”
He added that the U.S. government should not think investors will always be this optimistic.
“The extension of the deadline did not give enough time to negotiate properly and soon after that we had the usual pantomime about the U.S. debt ceiling.”
– Ganesh Rao of CNBC contributed to the report.
