Morning Market Brief
The White House is prepared to impose tariffs. Back in April, higher reciprocal tariffs were announced but subsequently paused for 90 days. That pause ends this Wednesday, leaving many countries scrambling to make a trade deal with the US. US officials, including President Donald Trump, said they would be imposing a standard tariff across several countries, while higher tariffs are scheduled to go into effect on August 1.
- Over the weekend, US Commerce Secretary Howard Lutnick, along with President Trump, said higher tariffs will go into effect on August 1. The administration hopes to reach trade deals with key trading partners in the meantime. Letters began being sent out yesterday to affected nations.
- It was announced that Japan, South Korea and South Africa, among other countries, would face a levy on exports to the US. Japan and the US have been engaged in trade talks but reached an impasse in response to trading automobiles and rice. As part of the announcement, President Trump threatened to increase tariffs proportional to the countries’ retaliatory tariffs, if they impose them.
- Trump also threatened a tariff on BRICS-aligned countries (Brazil, Russia, India, China and South Africa) taking part in what the US deems to be “anti-American” policies.
- The US and China reached a framework for a trade deal in mid-June. This agreement still requires full leadership approval. Canada remains at the trade table, working to repair its fractured relationship with the US. Canada and the US are working towards having a deal in place by July 21.
Investors were nervous as the July 9 deadline approached, but today’s announcement provides a bit of clarity. Still, as we have learned, much can change relatively quickly. More tariff letters will be sent out in the next day or two. Countries are likely going to rush to reach a trade deal before August 1. Yesterday’s events raised uncertainty about the global economy.
If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.