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Washington, Colombia District -July 7: Assistant Page from a letter to Japan and South Korea, signed by US President Donald Trump, announcing 25% tariffs, starting on August 1, during a daily press press -press -rally in the White House on July 7 in Washington.
Andrew Harnica | Getty Images | Gets the image
US President Donald Trump struck 14 trading partners on Monday – but world markets are still abandoning a new policy.
President announced on Monday that sent letters Heads of Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos, Myanmar, Bosnia and Herzegovina, Tunisia, Indonesia, Bangladesh, Serbia, Cambodia and Thailand. Each letter outlined new tariff rates on goods sent from a separate country to the United States.
The new rates, which make up 25% to 40% will come into force on August 1.
The Asia-Pacific Markets, which will directly suffer from new tariffs on Tuesday, made a muted response. Japanese benchmark Nikkei 225 The index ended by the day by 0.3% higher, while South Korea Kospi scored 1.8%.
European markets were also muted, trade Overall on Tuesday At the first trading session since Trump, he made announcements on the end of Monday. Pan -European Stoxx 600 The index was 0.09% lower after noon in London, after moving between minor losses and income by morning.
On Wall -Rate, Futures on the stock were Overall above before the trading session on Tuesday, on Monday, he left the lost session.
This is a sharp other reaction to the wild swings observed in April when the original announcement of Trump “Mutual Tariffs” caused a global sale.
Return Trade “Taco”
One of the reasons is probably a seemingly flexible approach to new policy. Speaking to journalists on Monday, he marked the firm on August 1 “The firm, but not 100% firm”.
“If (affected countries) call, and they say we would like to do something else, we will be open for that,” the president said.
According to AJ Bell Investment Analyst Dan Coatsworth, the markets are counting on Trump to abandon the tariff mode.
“Taco ‘(Trump always chickens) trading He returned to the table because the latest reports of the Trump administration at the tariffs offered some relief of financial market, “he said in a morning note on Tuesday, adding that the latest developments had removed the” immediate edge of the cliff “from the July 9 tariff.
However, the update also increases the uncertainty period of governments, corporations and consumers.
The fact that some key American trading partners – including the European Union, India and Taiwan – did not receive letters on Monday, or mean that they are close to sealed previous transactions – or they will receive letters soon, Paul Ashworth, Chief Economist of North America in Capital Economics.
Without transactions, an effective tariff rate for US imports will grow from 15.5% to 17.3%, he said. At the end of 2024 it was 2.5%.
‘Given the very muted exposure to US consumer prices still and that tariff revenues are now being processed thanks Republican Megabill This congress has just passed, the fall should be managed, ”he said.
Optimism of trading Europe optimism
In Europe, a muted stock reaction may also be related to the confidence that the trading transaction in the EU will be reached, which implies a 20% tariff rate that the White House planned to impose on the block goods.
On Monday, the EU diplomat reported CNBC that the European Union could receive a letter from Trump at the end of this week, giving the block more time to ensure the framework agreement with the White House. This is a broad agreement probably to include 10% basic tariff and can see certain goods – such as planes and perfumes – given the exceptions. The diplomat confessed, however, that it was “in the end, it all depends on Trump.”
It also was Widely reported On Monday, EU President Ursula von der Leyen held a “good exchange” with Trump last weekend.
Kiran Ganesh, a multi-storey strategist at the UBS Global Wealth Investment Investment Bureau, said CNBC on Tuesday morning that the EU did not receive a letter-pathetic because the transaction is close, assuring investors.
“Overall, the market is usually convenient with the idea that tariffs are likely to be settled close to the current effective rate (15%), albeit with likely tariffs to the lower level of the country and more at the sector level (semi-finals, pharmaceutical minerals),” said Ganesh in the email.
“Thus, in general, nothing in the letters would change the look at the market about where the tariffs will end or about the path that we get there (threats and negotiations).”
According to Tony Miduz, the head of the investment in the London management of the Wealth Management – but he suggested that some investors can independently.
“One of the complex trading transactions can take several months, even the years to agree that the market does not believe that 90 partial transactions in 90 days are possible,” he said in an email CNBC.
“Currently, investors seem to be comfortable traveling on the way of Trump to install politics, but mutual tariffs are a tax on activity, and early to judge the real impact on the economy. Perhaps everything will change if we start seeing a direct link in economic number.”
The US administration should not think that investors will always be so sanguine, he added.
“The expansion of the term does not give sufficient time for proper negotiations, and soon afterwards we have a regular pantomime against the US debt.”
. Ganesh Rao CNBC contributed to this report.
