What Happens After 50% Tariff on E.U. Delayed Until July 9, 2025
Last Friday, President Trump threatened to impose a 50% tariff on the European Union. Two days later, on Sunday, the President pushed the trade talk deadline to July 9. European Commission President Ursula von der Leyen requested the delay.
As usual, markets will erase some of last week's selling weakness. This relief rally may not last. Earlier last week, the weak U.S. treasury bond auction looked like that of Japan’s debt sale. Yields for U.S. and Japanese bonds rose as a result.
The U.S. dollar weakness continues to gain momentum. In response to the U.S. backing down on high tariffs, the currency is weakening considerably. On Monday, the U.S. dollar index fell below $99.99. It is correlated to the country’s ability to collect from high tariff rates. Duties would give the government additional revenue to pay down its debt. It would also let it cut income tax rates for the wealthiest earners.
Asian markets traded mixed overnight in response to the tariff pause on the E.U. U.S. markets may turn their focus on consumer confidence, housing, and durable goods data. Although consumer confidence will fall, hurt by worries about tariffs and persistent inflation, U.S. stock markets are still strong.
Investors may buy Nvidia (NVDA), Costco (COST), or Okta (OKTA) stock this week if they post strong quarterly results.
