Investors took in their stride news that Trump had sent letters to 14 countries outlining his new levies on expecting that most will hammer out an agreement before his new cut-off date of Aug 1.
However, he caused rumbles on trading floors again yesterday by announcing a 50% toll on copper imports and saying he was looking at 200% tariffs on pharmaceuticals.
The news sent the price of copper – used in a wide range of things including cars, construction and telecoms – to a record high yesterday, though it edged down in Asian business.
The measures would broaden a slate of sector-specific actions Trump has imposed since returning to the White House, with autos and steel hit with 25% taxes.
The president has ordered probes into imports of copper, pharmaceuticals, lumber, semiconductors and critical minerals that could lead to further levies.
“Today we’re doing copper,” he told a cabinet meeting yesterday. “I believe the tariff on copper, we’re going to make it 50%,” he added.
Commerce secretary Howard Lutnick later told CNBC the rate will likely come into effect at the end of July or on Aug 1.
Regarding pharmaceuticals, “We’re going to give people about a year, a year and a half to come in, and after that, they’re going to be tariffed,” Trump said.
“They’re going to be tariffed at a very, very high rate, like 200%,” he added.
He also warned “no extensions will be granted” to his Aug 1 deadline for tariff deals, after he pushed back his previous cut-off of July 9 to allow more time for talks.
Despite the prospect of more tariffs, equity traders largely took the latest announcement in stride, with Wall Street ending on a mixed note.
Asia saw similar moves, with losses in Hong Kong, Sydney and Wellington offset by gains in Shanghai, Singapore, Seoul, Taipei, Manila and Jakarta. Tokyo was flat.
“This is the market equivalent of driving with one foot on the gas and one on the brake – negative headline risk can impact sentiment one minute, while hopes of negotiation breakthroughs ease it the next,” said SPI Asset Management’s Stephen Innes.
“The president’s Truth Social posts are now a de facto ‘risk on-risk off’ barometer for global markets, each one examined like scripture, influencing metals, bond yields, and risk premiums in their wake,” Innes said.
However, “When combined with country-specific tariffs, the impact on prices of goods and services can be far more severe than current levels suggest,” Fabien Yip, a market analyst at IG said.
There was little major reaction to data showing Chinese consumer prices rose in June for the first time since January, providing a much-needed bright spot for the world’s number two economy.
Still, that was tempered by a sharper-than-expected fall in factory gate prices that suggested there were further deflationary pressures.