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Trump's latest tariff salvos leave markets unfazed: 'Sit still and do nothing,' analysts say
| USA | general | ✓ Verified - cnbc.com

Trump's latest tariff salvos leave markets unfazed: 'Sit still and do nothing,' analysts say

#Trump tariffs #Market reaction #Trade policy #Section 122 #Investor strategy #Global markets #Tariff negotiations #Supreme Court ruling

📌 Key Takeaways

  • Global markets largely shrugged off Trump's latest tariff increases
  • Analysts view tariffs as temporary measures and negotiating tactics rather than permanent policy shifts
  • Legal constraints have reduced Trump's tariff power compared to previous approaches
  • Investors are advised to remain patient and focus on economic fundamentals
  • Cryptocurrencies showed sharper volatility than traditional markets

📖 Full Retelling

Global markets showed little reaction to U.S. President Donald Trump's latest tariff announcements on Monday, as investors assessed whether the increased global tariffs to 15% from 10% would have lasting impact or were merely another negotiating tactic, following the U.S. Supreme Court's striking down of his previous levies under the International Emergency Economic Powers Act. Asia stocks were mostly higher, safe-haven assets remained firm, with yields on the 10-year U.S. Treasury staying relatively unchanged while gold inched about 1% higher, and the U.S. dollar index slid around 0.3%. Analysts suggested the market had already anticipated these moves and had learned from previous tariff turmoil that the economy remains resilient. 'The market didn't really react much to the news. It was already widely anticipated,' Ed Yardeni, president of Yardeni Research, told CNBC. 'The market learned last year that the economy is remarkably resilient in the face of what I call Trump tariff turmoil.' Trump's new approach comes after the Supreme Court invalidated many of his previous tariffs, forcing a shift to Section 122 authority, which imposes temporary tariffs that are harder to tailor country by country. Market strategists noted this represents more of a procedural reset than a reversal of protectionist policy, as Section 301 and Section 232 duties targeting steel, autos, and China remain in place. 'It was much easier when he could use tariffs as a sledgehammer,' Yardeni commented. 'Now it's become sort of a rubber mallet. It's certainly not as powerful a tool.' For investors, the consensus was patience and focus on fundamentals. Hugh Dive, chief investment officer at Atlas Funds Management, advised: 'Sit on hands and do nothing, this is just noise, there will be something new to worry about within a few days.' With midterm elections approaching, Yardeni suggested trade may recede as a political priority, though some analysts remained more cautious about positioning portfolios away from vulnerable U.S. equities.

🏷️ Themes

Trade Policy, Market Reaction, Investor Strategy, Legal Framework

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Deep Analysis

Why It Matters

The market's muted reaction to President Trump's tariff announcement indicates that investors have become accustomed to his trade policy tactics and view them as temporary negotiating tools rather than durable policy shifts. This suggests that the global economy has developed resilience to such trade disruptions, with investors prioritizing economic fundamentals over short-term political noise. The stability helps prevent widespread market panic but underscores the persistent uncertainty facing international trade.

Context & Background

  • Markets largely shrugged off Trump's tariff increase from 10% to 15%
  • The Supreme Court recently invalidated previous tariffs imposed under the International Emergency Economic Powers Act
  • New tariffs are implemented under Section 122, replacing the old ones temporarily
  • Existing Section 301 and Section 232 tariffs on items like steel and Chinese goods remain in place
  • Analysts note Trump has a history of using tariffs as a negotiating tactic before recalibrating

What Happens Next

Analysts expect investors to adopt a wait-and-see approach, focusing on corporate earnings and economic resilience rather than immediate trade policy shifts. The tariff issue may recede as a political priority heading into the midterm elections, with markets likely to treat further announcements as noise unless they signal a broad, durable escalation.

Frequently Asked Questions

Why did the markets not react strongly to the new tariffs?

Markets had widely anticipated the move and have learned from past experience that Trump's tariff announcements are often temporary negotiating tactics rather than lasting policy changes.

What is the legal basis for the new tariffs?

The new tariffs are imposed under Section 122, replacing previous tariffs that were struck down by the Supreme Court, while existing tariffs under Section 301 and Section 232 remain in effect.

How should investors respond to the tariff news?

Many analysts advise investors to sit tight and focus on economic fundamentals, as the tariffs are viewed as temporary noise rather than a structural reset.

Original Source
Markets took U.S. President Donald Trump's latest tariff salvos largely in their stride, with investors assessing whether the moves will have a lasting impact on trade or are another negotiating tactic. The market has so far shrugged off the tariffs. Asia stocks were mostly higher, safe-haven assets stayed firm, with yields on the 10-year U.S. Treasury remaining relatively unchanged, while gold inched about 1% higher. The U.S. dollar index slid around 0.3%. "The market didn't really react much to the news. It was already widely anticipated," Ed Yardeni, president of Yardeni Research, told CNBC. "The market learned last year that the economy is remarkably resilient in the face of what I call Trump tariff turmoil." Sit on hands and do nothing, this is just noise, there will be something new to worry about within a few days. Hugh Dive Atlas Funds Management Trump's move to raise global tariffs to 15% from 10% initially announced, comes after the U.S. Supreme Court struck down a broad swath of levies he had imposed under the International Emergency Economic Powers Act. Market strategists said that the Supreme Court's ruling looks more like a procedural reset than a reversal of protectionist policy. Section 122, under which the new tariffs have been imposed, effectively replaces the invalidated IEEPA tariffs on a temporary basis, while leaving in place duties under Section 301 and Section 232, including those targeting steel, autos and China. So, not much has changed to unnerve the markets — at least, not yet. Sit tight and do nothing? Analysts suggest that the key for investors now is to be patient. "No statement on trade policy from Trump is now treated as durable," said Hugh Dive, chief investment officer at Atlas Funds Management. "Sit on hands and do nothing, this is just noise, there will be something new to worry about within a few days," he added. Trump has developed a reputation among investors for using tariffs as a negotiating tactic, announcing sweeping or ag...
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