Investors react to Trump's 30% tariffs on EU and Mexico
The EU had initially hoped to reach a comprehensive trade agreement with the U.S. for 27-country bloc, but until Trump's social media post on Saturday it was unclear if it might get a letter announcing more tariffs or when an agreement might be finalized.
Earlier this week, Trump issued new tariff announcements for a number of countries, including Japan, South Korea, Canada and Brazil, as well as a 50% tariff on copper.
COMMENTS:
MICHAEL BROWN, SENIOR MARKET STRATEGIST, PEPPERSTONE, LONDON:
"There are still three weeks until August, 1 which is a lifetime in this sort of situation. Again, I think it's all part of this 'escalate to de-escalate' strategy in terms of trying to bring people to the table and get some more concessions out of them.
In terms of the EU one specifically, I guess you could argue that the threat (from Trump) the other day was 50%."
"The risk is whether the EU, because all of the reporting has been around the U.S.-EU deal is close, take this poorly and actually go: 'OK, fine, well, we're just going to throw in place some countermeasures' and then things start to escalate once more, which I think really then starts to change the calculus away from, this is just a negotiating gambit and back towards Liberation Day."
"Depending on what happens in the next 24 hours or so, I imagine that the knee-jerk move is euro-negative, eurozone asset-negative. And then, as calmer heads prevail, it comes back to the fact that, is it just a negotiating gambit?
"Certainly, I think that the initial reaction will be a case of, actually, this is pretty devastating if it does come into effect and we need to price, not necessarily the full probability of it coming into effect, but at least there needs to be a chance, discounted that an export-led economy to its main market has got a 30% tariff on it, and it's just not going to be able to cope with that."
KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CORPAY, TORONTO:
"Traders spent much of the last week hedging against a broadening in the president's tariff schedule, but at 30%, today's action has likely topped expectations.
'Although rising tariffs remain a bigger threat to the US itself, it is fair to expect the euro and Mexican peso to come under renewed selling pressure at tomorrow's Asia open.
'At some point soon, it will become clear that Trump's protectionist agenda has not been appropriately discounted in currencies, in asset prices, or in measures of volatility. A moment of capitulation is coming, in financial markets, or in the White House itself."
MATHIEU SAVARY, CHIEF STRATEGIST -EUROPE, BCA RESEARCH, MONTREAL:
'Trump's strategy is to make outrageous demands, then bring them down, then make another push to win some last-minute concessions, and then a trade deal materializes. It's a framework that we remember from Trump in his first presidency and that is what is happening now."
'Whatever is said now doesn't matter; what matters is where we will settle.'
Savary said he expects that Europe eventually 'will have to resign itself to accept a 10% tariff, but that is something that the EU can actually handle."
MARK MALEK, CHIEF INVESTMENT OFFICER, SIEBERT FINANCIAL, NEW YORK:
'If you look at the 22 or 23 letters that went out, 30% now is the average proposed across the board number here, which is significantly higher than the 10% that the market had been accepting as a baseline figure."
If this new, higher tariff level sticks, 'it has significant implications for the trade relationship with the EU and the US economy, since we import everything from luxury cars to industrial chemicals.'
"Markets have been moving higher on the assumption that these trade talks would be resolved. But that comfort is going to turn into a headwind for the market unless we get some real results one way or another. The market has been giving Trump a pass so far recently on tariff talks, but earnings season could upset that balance' if companies release weaker-than-expected results or include warnings about the impact of tariffs on their future revenues and profits.
'A trading day like yesterday (Friday) really wasn't a huge decline given that we're still sitting right below all time highs, and right ahead of earnings season. But if markets stop giving Trump the benefit of the doubt, who knows?'
SAM STOVALL, MARKET STRATEGIST, CFRA, PENNSYLVANIA:
'I think investors will still just take a wait and see attitude and that in the end markets will respond to certainty. That will come if get an unexpectedly hot reading on inflation, as tariffs filter their way down into the hard data.
"Unless and until we get a change in the data, I think the path of less resistance is higher' for U.S. stocks.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
27 minutes ago
- Daily Mail
Our city is being ruined by 'billionaires' playground'... we're being forced out by tourists
A Texas city is becoming a billionaires' playground as it moves forward with a new sports arena that locals are riling against. A project that was initially code-named Project Marvel is facing huge backlash from local residents who have no desire for a new San Antonio Spurs arena to be constructed downtown. 'We don't need to provide a $4.5 billion playground for tourists and billionaires that does not provide economic development for our city,' Father Jimmy Drennan, of St. Margaret Mary Catholic Church, told the San Antonio Express-News. For years, there have been talks amongst city officials about building a new Spurs arena behind closed doors and forcing consultants and developers to sign nondisclosure agreements. But locals don't want their taxpaying money to go toward the new arena, which they say, won't get any love from those residing there, only tourists and billionaires. 'This is a business deal with the Spurs and the city. It should also be a business deal for us,' Patrick Stolmeier, a local, told The Express-News. Anne Alexander cofounded a campaign called Stop! Project Marvel and several of her organization's signs - which read: 'No! Project Marvel' - have been popping up in plenty of neighborhoods since. The campaign might become a thorn in politicians' sides as more and more residents are becoming disdainful about the project. And locals are angered by the lack of transparency and communication and don't want it to be on the ballot in November. 'There are too many unanswered questions, including costs, economic benefits, alternatives, and financing,' Alexander's campaign said in a statement. 'Is downtown for the people or just for tourists?' Alexander's cofounder, Annalisa Peace, questioned. They also worry about traffic jams from the all the tourists coming downtown and whether or not locals would even be able to afford tickets to the games, which is currently held at the Frost Bank Center on the East Side. The average income in San Antonio is $34,000 for an individual and $63,000 for a household. 'When I tell people: "Would you like to sign in opposition?" they grab it out of my hands to try to sign it,' Mike Phillips, a COPS/Metro Alliance, an interfaith group that opposes the arena, told the outlet. Assistant City Manager, Lori Houston, told The Express-News that officials hear the backlash, but said the city has no desire to cancel their plans. 'I've heard people say: "How do I stop this project?" You take a vote,' she said on Tuesday. 'But we don't want to stop this project.' Tourism is a huge moneymaker for the Southern city and adding the arena downtown would help increase foot traffic and help finance the area through taxes on hotels and rental cars. Officials also worry that if the area isn't built, the basketball team could look elsewhere and that would lower the city's profit margin. And not every resident is viciously opposed to it and Keely Petty told The Express-News that she believes it could put San Antonio on the map next to Houston and Dallas. The city is also looking to expand the convention center again, which could cost up to $900million and would have to move the San Antonio Water System chilled water plant to do so. How much it would cost to move the water system is unknown.
The Guardian
38 minutes ago
- The Guardian
Trump's 10% tariff on most UK goods ‘here to stay', says Lord Mandelson
The 10% tariffs on most UK goods imported into the US are likely 'here to stay', according to Lord Mandelson. The British ambassador to the US said the 'universal 10% tariff' was unlikely to change but that there was 'scope' for negotiations in different sectors and industries, such as technology. Speaking to the Sunday Times, he added that the US president, Donald Trump, should expect a 'warm reception' when he visits the UK for a second state. 'He should expect a warm reception because he really does love Britain. He hugely admires it,' Mandelson said. 'He trusts Keir Starmer. It's not a question of expressing our gratitude. My lodestar here is to demonstrate respect, not sycophancy. I don't think the administration has any problem with that.' The comments came amid confusion over whether British steel imports will continue to face tariffs of 25% or even double to 50%. While a 10% tariff remains in place for most imports, the trade deal between the two nations reduced levies on car and aerospace imports. However, the prime minister and Trump suggested further negotiations were needed to reduce steel tariffs. On Saturday Trump announced that goods imported from the European Union and Mexico will face a 30% US tariff rate starting on 1 August, in letters posted on his social media platform, Truth Social. It came as a shock to European capitals, as the European Commission and the US trade representative, Jamieson Greer, had spent months hammering out a deal they believed was acceptable to both sides. The agreement in principle, which was put on Trump's desk last Wednesday, involved a 10% tariff, five times the pre-Trump tariff, which the bloc had already described as 'pain'. Sign up to First Edition Our morning email breaks down the key stories of the day, telling you what's happening and why it matters after newsletter promotion EU trade ministers will meet on Monday for a pre-arranged summit and will be under pressure from some countries to show a tough reaction by implementing €21bn ($24.6bn) in retaliatory measures, which they had paused until midnight the same day. Meanwhile, Trump's unprecedented second state visit to Britain is likely to take place in September, according to media reports, at a time when parliament is not sitting. This would avoid the scenario of MPs boycotting or protesting a Trump address in the Commons.
The Independent
39 minutes ago
- The Independent
Rosie O'Donnell goes medieval on Trump over citizenship threat: ‘King Joffrey with a tangerine spray tan'
Rosie O'Donnell fired right back at President Donald Trump after he threatened to revoke her U.S. citizenship in a post on Truth Social on Saturday morning. The comedian and former talk show host, a longtime critic of the president, was — like Trump — born in New York to one American-born parent and one immigrant parent. In a blistering response to his threat, she called him 'King Joffrey with a tangerine spray tan,' a reference to a much-hated, sadistic, authoritarian character from Game of Thrones. Trump earlier wrote on Truth Social: 'Because of the fact that Rosie O'Donnell is not in the best interests of our Great Country, I am giving serious consideration to taking away her Citizenship.' He continued: 'She is a Threat to Humanity, and should remain in the wonderful Country of Ireland, if they want her. GOD BLESS AMERICA!' O'Donnell, who relocated to Ireland days before Trump began his second term, didn't take long to respond. She posted a photo of Trump with the late sex trafficker Jeffrey Epstein to Instagram, and wrote: 'Hey Donald –you're rattled again? 18 years later and I still live rent-free in that collapsing brain of yours.' O'Donnell wrote that while he had called her 'a threat to humanity,' she is 'everything you fear: a loud woman, a queer woman, a mother who tells the truth'. After contrasting their lives and outlooks, O'Donnell writes: 'You want to revoke my citizenship? Go ahead and try, King Joffrey with a tangerine spray tan.' She adds: 'I'm not yours to silence. I never was. 🇮🇪 Rosie.' O'Donnell and Trump have been feuding since 2006, when she criticized his moral character, calling him a 'snake-oil salesman' and 'not a self-made made,' while she was a host of The View on ABC. They have traded barbs ever since. There is no presidential power to strip anyone of citizenship, but since returning to the White House, Trump has sought to end birthright citizenship, guaranteed to Americans under the 14th Amendment to the Constitution. The 14th Amendment states: 'All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.' In another alarming move, a recently unveiled memo from the Department of Justice outlines the Trump administration's plans to 'maximally pursue' denaturalization of American citizens. Approximately 25 million people in the U.S. are naturalized citizens, or immigrants who completed the lengthy legal process to gain citizenship. According to the June 11 memo, the Justice Department's civil division will 'prioritize and maximally pursue denaturalization proceedings in all cases permitted by law and supported by the evidence.' That evidence would need to be proof that an individual 'illegally procured' citizenship through fraud or other means. It is rare, but it does happen. Days before Trump's return to the White House, the 63-year-old comedian left the U.S. and moved to Ireland, which she says has helped improve her health and sleep. Nevertheless, she remains a fierce critic of Trump, and on Sunday, she blamed him for the impact of the deadly flash floods in Central Texas in a lengthy TikTok video. 'And, you know, when the president guts all of the early warning systems and the weather forecasting abilities of the government, these are the results…' O'Donnell said in part. As many as 129 people are known to have died in the disaster, with contributing factors being an insufficient early warning system and the timing of the storm, which hit as it did in the middle of the night. In March, O'Donnell questioned how Trump comfortably won every swing state in the 2024 election, claiming that one of his 'best friends owns and runs the internet,' likely referring to former 'first buddy' Elon Musk. Despite her long-running criticism of the president, there is no evidence that O'Donnell is a 'threat to humanity.'
