“Investors shouldn’t bank on Trump only bluffing with the 30% tariff threat on EU goods,” Brian Jacobsen, chief economist at Annex Wealth Management, wrote in an email. “That level of tariffs is punitive, but it likely hurts them more than the US, so the clock is ticking.”
Financial markets, which have shown increasing insensitivity to tariff threats from the US, will face a test at the Monday open after President Donald Trump declared a 30% rate for the European Union and Mexico effective Aug 1.
Trump has ratcheted up trade measures, promising that more tariffs are coming to everyone from Canada to Brazil to Algeria and inviting trading partners to negotiate further. Despite warnings of complacency from the likes of JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, investors have so far behaved as if they’re counting on the US president to back down, having seen previous U-turns from his administration.
