US Tariffs Spark Global Market Volatility and Concerns

US President Donald Trump announced new tariffs on copper and pharmaceuticals, with rates of 50% and up to 200% respectively. The S&P 500 was largely unaffected, closing flat, as investors either dismissed the tariffs as hollow threats or downplayed their potential inflationary impact. Trump's Council of Economic Advisers chairman, Stephen Miran, described the likelihood of tariffs causing higher prices as a "rare event" comparable to "pandemics or meteors." China's producer prices fell 3.6% in June, while consumer prices rose 0.1%. The economies of South Korea and Japan may contract further due to the tariffs. US stocks were mostly unchanged, and retail investors outperformed fund managers, according to Robinhood's CEO.

US President Donald Trump's administration has delayed imposing tariffs on several countries until August 1, amid failure to strike trade deals. The delay is seen as a sign of the administration's inability to negotiate, with other countries pushing back against the US. Japan and South Korea were singled out for tariffs, with Japan hinting at using its ownership of US government debt as leverage. The value of the dollar has declined 10% this year, and trade numbers are shifting, with Chinese exports to the US falling but rising to other countries. The effective US tariff rate has risen to 15%, and other countries are likely to trade more with each other in response.

The US and EU are on the brink of a trade war as President Trump considers imposing tariffs of up to 50% on European goods. The EU is the US's largest trade partner, with $2 trillion in annual trade, and tariffs could hurt consumers on both sides. Trump has complained about the EU's trade surplus, but economists say the deficit is largely due to American demand for European goods. If tariffs are imposed, US consumers could face higher prices for goods such as French cheese, Italian leather goods, and German electronics. The EU is prepared to retaliate with tariffs on American products, including beef, auto parts, and Boeing airplanes. Economists warn that a trade war could hurt both economies, with the US potentially losing 0.7% of its GDP. A deal is possible, but the road to an agreement is expected to be rocky.

Asia-Pacific markets traded mixed on Wednesday following US President Donald Trump's announcement of new tariffs and comments on trade. Japan's Nikkei 225 and South Korea's Kospi indexes ended the day higher, gaining 0.33% and 0.6% respectively. In contrast, Australia's S&P/ASX 200 benchmark fell 0.61%. Trump's tariff announcements, including a 50% levy on copper imports and potential tariffs of up to 200% on pharmaceutical exports, impacted various sectors. South Korean defense stocks rallied after Trump suggested Seoul should cover its own military costs. Copper prices slipped following the announcement of a 50% tariff on copper exports to the US. Analysts at Mizuho Securities noted that Trump's tariff deadlines are an "unhelpful distraction" from greater geo-economic threats, and that Asia is more vulnerable to the impact of further tariff shifts.

Stock futures were little changed early Wednesday as investors monitored the latest tariff updates from President Donald Trump. The S&P 500 and Dow Jones Industrial Average futures slipped slightly, while Nasdaq 100 futures were marginally lower. Trump announced new tariffs on 14 countries, with rates ranging from 25% to 40%, and a 50% levy on copper imports. The moves caused global stock markets to react, with some posting modest gains. Traders are also awaiting the release of the Federal Open Market Committee's minutes from its last meeting. Meanwhile, Goldman Sachs highlighted dividend-paying stocks as a hedge against market volatility, and Jeff Bezos sold $666 million in Amazon shares as part of a planned stock sale.

U.S. President Donald Trump's imposition of 25% tariffs on imports from Japan and South Korea is expected to exacerbate economic troubles for both countries, which are already experiencing a slowdown in growth. Japan's GDP is projected to decline by 0.1 percentage point by end-2026, with the economy barely growing in the second half of 2025 and first half of 2026. Both countries are exports-dependent economies, with automobiles and steel being among their top exports to the U.S., which already face 25% and 50% tariffs, respectively. Trump's move is seen as a pressure tactic to open their markets to the U.S., and while markets are currently shrugging off the tariff threats, economists warn of considerable headwinds to growth if a deal is not reached.

Tariffs imposed by the US, such as those threatened by President Donald Trump, often backfire and harm the country's economy. The levies drive up costs for producers and prices for consumers, with around half of US imports being intermediate products needed to make finished American goods. Trump's tariffs so far have not meaningfully boosted US inflation, slowed the economy, or hurt jobs growth, but economists warn of a delayed reaction that could become problematic toward the end of the year. Tariffs can reduce America's economic output, lower labor productivity, and lead to job losses, particularly in industries that rely on imported inputs. The uncertainty surrounding Trump's trade policy is already weighing on American companies' willingness to invest, with surveys suggesting that small businesses are hesitant to make capital outlays due to the lack of clarity over future tariffs.

European markets are expected to open mixed, with the FTSE 100 up 0.2%, DAX up 0.1%, and CAC 40 up 0.5%. Global markets have been volatile due to trade tariff news, with US President Donald Trump announcing new tariffs and ruling out a deadline extension on existing tariffs. Investors are awaiting a potential US-EU trade deal and comments from the OPEC seminar in Vienna, as well as updates from the RAISE Summit in Paris on artificial intelligence.

Global stock markets have surged to record highs in the first half of 2025, with the MSCI All Country World Index rising nearly 10%. European equities have led the gains, with Greece, Poland, and the Czech Republic being the top performers, rising 60%, 56%, and 52% respectively. Greece's strong performance is attributed to its recovering economy, banking sector reforms, and strong tourism. Europe's rally is also driven by recovering growth, undervaluation, and a rotation out of US stocks. In Asia, South Korea has staged a comeback, rising over 30%, driven by hopes of corporate governance reforms and a relatively resilient export sector. In contrast, Thailand and Turkey have been the worst performers, with Thailand's market slumping over 13% due to political turmoil and economic woes, and Turkey facing economic headwinds, political repression, and runaway inflation. Only five stock markets have posted losses year-to-date, and some analysts believe the worst of the negative shock may be behind them.

Brazil and India have vowed to triple their bilateral trade during Indian Prime Minister Narendra Modi's state visit to Brasilia, in a show of unity against US President Donald Trump's tariff threats and criticism of the Brics bloc. The two countries signed several agreements and announced plans to step up Indian engagement with the South American trade bloc Mercosur, as Trump claimed that Brics was set up to hurt the US and "degenerate" the dollar.

Malaysian Prime Minister Anwar Ibrahim will raise concerns over US tariffs with US Secretary of State Marco Rubio during their meeting, as Malaysia faces a potential 25% tariff imposed by the US. Anwar has expressed concerns that the tariffs will negatively impact Malaysia's economy and has sent teams to negotiate a reprieve. Rubio is attending an Asean summit, marking his first official visit to the region since Donald Trump's return to the White House.