Trump delivers a "tariff blow": 70% messages shake the markets and raise fears of a new trade war. $TRUMP
In a surprising strategic turn, the Trump administration has begun to unilaterally impose a new round of tariffs, threatening to impose tariffs as high as 70% on trading partners, sending waves of concern through global markets and raising fears of delays or collapses in trade deals.
Details of the recent escalation:
The new step: The administration started sending "10 to 12" messages on Friday, with more to come in the following days, unilaterally specifying the new tariff percentages.
Deadline: This move comes before the deadline set by Trump on July 9 for reaching trade agreements.
Tariff levels: Trump stated that the tariffs "will range from 10 or 20% up to 60 or 70%."
Implementation: These tariffs will take effect on August 1, marking a shift from negotiation to imposition.
How are the markets interpreting this move?
The market's reaction was immediate and negative. UBS Bank sees this move as "indicating a delay in trade deals," which is a disappointment for investors who were hoping for agreements after the success with the UK and Vietnam.
Markets are not only afraid of the tariffs themselves but also of the strategy being revealed: an administration that prefers to impose decisions unilaterally because it is "much easier," as President Trump put it, rather than engaging in complex negotiations.
But... what is the economic logic behind this escalation?
Beyond market concerns, the U.S. administration sees a positive side to this strategy: a massive increase in government revenue.
Data indicates that U.S. tariff revenues reached a record high of $22 billion in May.
Goldman Sachs estimates predict that this figure will continue to rise if agreements are not reached, providing a huge source of revenue for the U.S. Treasury.
In summary: A dual strategy
We are facing a two-faced strategy: on one hand, it raises concerns in the markets and increases the risks of a full-scale trade war. On the other hand, it provides direct financial gains for the U.S. Treasury and increases the negotiating pressure for the Trump administration.
