Trade pressure sharply intensified on Monday, 7 July, when President Donald Trump sent tariff notification letters to leaders of 14 countries. The letters outlined details of new reciprocal tariff rates, some reaching up to 40%. Though these tariffs were set to take effect on Wednesday, Trump signed an executive order delaying their implementation—except for China. The new date was set for the 1st of August, allowing some room for negotiation.
Countries like Japan and South Korea are seeking further talks with the U.S. Trump stated that the tariffs were the result of U.S. trade deficits and foreign trade policies. He said that, to avoid the tariffs, countries should manufacture their products in the U.S.
This comes after the earlier deadline of 9 July. That date marked the end of the pause on reciprocal tariffs that had been accepted in April. Since then, a minimum 10% tariffs has been in place.
European stocks
While Trump tariff news has generated uncertainty and concerns, in Europe there was some optimism. European stocks were higher as investors were hopeful that a trade deal will be announced very soon. They also expected that tariffs on European exports to the US would be around 10%.. The Stoxx 600 extended its gains but as we mentioned, this speck of optimism is mainly concentrated in Europe.
Copper futures rise
Trump levied a 50% tariff on copper and stated that pharmaceuticals will face 200% tariffs within a year. This was an effort to spur companies such as Eli Lilly and Johnson & Johnson. The goal was to encourage them to shift drug manufacturing within the U.S.
As a result of the announcement, COMEX copper futures reached a record high, while copper prices on India’s MCX weakened due to expectations that the surplus supply would move to other markets.
The sweeping 50% tariff on copper imports is in line with steel and aluminium under new trade restrictions. The policy is meant to protect domestic production and reduce reliance on foreign supplies, most notably the biggest supplier Chile.
Worries about inflationary pressures
There are worries that a 50% tariff will increase inflationary pressures, which had only just begun to ease. Federal Reserve (Fed) officials have expressed their view that aggressive tariff policies could boost inflation in the second half of the year and restrict the Fed’s ability to offer support to the US economy, despite the strong jobs data.
Which are the major new tariffs announced?
On 8th July 2025, the Trump administration announced the forthcoming issuance of tariff warning letters to 15–20 additional countries that would take effect on 1st August. They will be added to the 14 earlier recipients such as Japan, South Korea, South Africa, Laos, and Myanmar who were already facing higher tariffs of between 25% and 40%.
Motivation and timing: No extensions after 1 August
Reiterating his previous words, Trump said the 1 August deadline stands and no further extensions will be issued.
Section 232
These tariffs are being applied using national‑security authorities (Section 232), for such imports such as metals and now also potentially pharmaceuticals and semiconductors. On 8 March, 2018, President Trump exercised his authority under Section 232 of the Trade Expansion Act of 1962 to enforce a 25% tariff on steel imports, excluding Canada and Mexico, to protect national security.
BRICS also in the crosshairs
Trump sought an additional 10% tariff on BRICS (Brazil, Russia, India, China, South Africa), accusing the bloc of weakening the U.S. dollar and pursuing “anti-American” policy.
시장 영향
Copper prices rose with reports saying that copper spiked to $5.65/lb—over 12.5% more—on the back of tariff news, with draft implementation due late July or 1 August.
Equity markets struggled
Wall Street reacted fast. The Dow dropped over 400 points on 8 July and fell up to 600 points on 7 July after Trump’s “Liberation‑Day” flavour tariff threats: 25% on Japan, South Korea, Malaysia, and others. This in turn triggered sell‑offs in tech and autos.
Currency & safe‑haven moves
Markets shifted to a risk‑off mode: gold remained stable at $3,300/oz and significant currency pairs like EUR/USD and USD/CAD responded to shifting U.S. dollar and yield expectations.
Inflation and consumer prices
CNBC reported that tariffs impose significant price increases on consumers. For example, tariffs on cotton sweaters already increased their price from $30 to $35.80 (at 71.5% tariff) and could increase as far as $57.97 with proposed rises. These do highlight legitimate concerns about inflation reaching the households themselves.
Aside from inflation risks, Fed officials like Governor Waller are offering caution. They believe the tariff-induced price impact is likely to be fleeting and should not interfere with the current policy trajectory. A rate reduction remains on the table pending broader economic indicators.
Pharma leaders warn that 200% tariffs would wreak havoc on access to supply and R&D investment. Japanese and Korean automakers are battling fiercely because their exports are hit with high 25% tariffs
Trump trade adviser Peter Navarro criticised Apple for its dependence on China. He demanded manufacturing changes despite financial and logistical hurdles.
The diplomatic landscape
Talks with China will start in early August. Meanwhile, South Korea and Japan are negotiating to reduce the impact on automobiles and electronics, and there is a dialogue going on with the EU on trade channels and tariff exemption. Countries will hit back at U.S. tariffs with China already having imposed tit-for-tat duties following past U.S. actions.
TACO: Trump Always Chickens Out
Analysts have coined the acronym TACO—Trump Always Chickens Out—to characterise his pattern of bombastic threats followed by stalling, negotiating, or backing down. Although threats remain potent, implementations occasionally stall under pressure.
Economic risks
The administration argues that tariffs raise domestic production, help reduce trade deficits, and strengthen national security.
Some critics warn that excessive tariffs on critical industries, such as copper and pharmaceutical imports, could stifle growth and disrupt supply chains. They also fear it could increase consumer prices and prompt foreign retaliation.
Trump’s latest tariff round signals the return of big guns protectionism which has been criticised as the biggest risk for economic expansion.
Markets are responding with volatility from the increase in copper to tech-fuelled stock crash. While national manufacturing would benefit from reshoring, consumer goods are hit with substantial price increases. Global trade stability is also threatened once again. Whether this balloons into an all-out trade war or brings partners to the bargaining table remains the million-dollar question.
Disclaimer: This material is for general informational and educational purposes only and should not be considered investment advice or an investment recommendation. T4Trade is not responsible for any data provided by third parties referenced or hyperlinked in this communication.
