US President Donald Trump announced Monday that he had sent letters to 14 countries outlining steep tariff rates that will take effect on August 1. However, global markets have largely shrugged off the news, with Asian-Pacific and European stocks staging a muted response.
Trump’s seemingly more flexible approach to the new policies may be one reason for this reaction. Speaking to reporters, he labeled the August 1 deadline “firm, but not 100% firm.” He also stated that if affected countries want to negotiate alternative terms, the US administration will be open to discussing them.
Analysts believe that Trump’s flexibility has removed some of the uncertainty surrounding the new policies, which is why markets have reacted more calmly. However, the fact that some key trading partners, including the European Union and India, did not receive letters on Monday raises questions about whether preliminary deals are being sealed or if letters will be sent shortly.
Some experts predict that the effective tariff rate on US imports could rise to 17.3% without deals, although they argue that the impact of tariffs on consumer prices has been minimal so far. Others believe that a EU-US trade deal is likely to avert higher tariff rates, as European Commission President Ursula von der Leyen had a “good exchange” with Trump over the weekend.
While some investors remain cautious, others are confident that markets will find a way to adapt to Trump’s policies. However, they warn that the US administration should not assume that investors will always be complacent in response to policy changes.
Source: https://www.cnbc.com/2025/07/08/trump-tariffs-global-stock-markets-call-presidents-bluff-ftse-100-sp-500-nasdaq-dow-jones-dax-nikkei.html