Stocks tumbling, inflation popping popcorn, and crypto yelling 'Challenge accepted!' 😂 Volatility mode: ON!

Here is an updated summary about the new tariffs imposed by the US on imports from approximately 69 countries, including the EU. Since the current date is August 7, 2025, the tariffs came into effect a few hours ago (at 12:01 a.m. EDT). I have checked and updated the information with recent data from official sources, financial news, and economic analyses, representing balanced perspectives (from the US administration, critical economists, and global reactions). I have also included the initial impact on markets, based on immediate post-implementation reactions.

Context of the tariffs

  • President Trump signed an executive order on July 31, 2025, which imposes "reciprocal" tariffs on imports from 69 countries, with rates ranging from 10% to 41%. These are intended to reduce the US trade deficit (over 1 trillion dollars annually) and protect national and economic security. The tariffs target countries with large trade deficits with the US, including the EU (15% uniform, including on cars), Canada (35%), Brazil (50%), India (25%), Switzerland (39%), Taiwan (20%), and others such as Bangladesh, Vietnam, or South Africa.

  • Temporary exceptions: Some countries (e.g., Mexico) have received 90-day delays for negotiations, and specific sectors such as steel, aluminum, automobiles (already at 25-50%), or energy products are treated separately. The tariffs represent a continuation of policies from Trump's first term, but broader, covering almost all imports (the effective average US tariff rate increases to ~18% from 2.3% last year).

  • Official motivations: Reducing the US public debt (34 trillion dollars) through tariff revenues (estimated at 27 billion dollars so far), protecting domestic industries, and forcing negotiations for fair trade. Critics (including economists from J.P. Morgan or the Tax Foundation) see this as a hidden tax on American consumers, with risks of global retaliation.

Exact time of entry into force
The tariffs came into effect on August 7, 2025, at 12:01 a.m. Eastern Time (ET).

Impact on markets
These tariffs have triggered strong immediate reactions, with short- and long-term effects. Here is a structured analysis, based on recent data (including post-implementation reactions):

  • Volatility and declines on stock exchanges

    • Global markets have recorded declines: for example, stocks have fallen amid risk-off sentiment, with major indices affected. The VIX index has risen significantly, reflecting increased volatility.

    • Crypto: Crypto markets have recorded declines, with Bitcoin showing weakness due to the general risk sentiment.

    • Traders report panic and risks of massive sell-offs, including on meme stocks and ETFs.

    Inflationary pressures and costs for consumers

    • The tariffs act as an average tax of ~1,300 USD per American household in 2025, increasing prices of imports (e.g., electronics, textiles, pharmaceuticals).

    • Inflation has risen (e.g., to 2.7% YoY in June), complicating Fed policies and delaying interest rate cuts. Sectors such as retail, apparel, and semiconductors are suffering margin compression.

    Long-term economic effects

    • US GDP reduction: Estimates of -0.2% to -1.4% (depending on retaliation), with job losses (e.g., only 73,000 jobs added in July, below expectations; unemployment at 4.2%).

    • Increases in commodity prices: Copper at 50%, pharmaceuticals possibly at 200-250% (delayed 12-18 months), accelerating the de-globalization of supply chains.

    • Expected retaliations: The EU, Canada, and China are preparing measures (e.g., tariffs on American goods worth 28-30 billion EUR), with discussions about "trade war 2.0".

US Stock Markets: Immediate Impact - Declines on indices; increased volatility due to risk-off sentiment; Long-term Impact - Possible correction if retaliation escalates; markets accustomed to threats, but now reality

Inflation: Immediate Impact - +0.5-1% estimated; higher prices on imports, already reflected in recent data; Long-term Impact - Persistent pressures, delaying Fed interest rate cuts (chances of cut in September reduced)

Global Economy: Immediate Impact - Exports from affected countries decline (e.g., impact on Canada, India); Long-term Impact - Reduction in global trade by 2-3 trillion USD; relocations of supply chains

Key Sectors: Immediate Impact - Retail, semiconductors, pharma: reduced margins; rising prices; Long-term Impact - Opportunities for domestic US production, but higher costs in the long term

In conclusion, the tariffs, now active, amplify uncertainty, with markets reacting negatively to the risks of inflation and trade war. Economists warn that the effects could be more severe if retaliation escalates, although the administration sees long-term benefits for the US.

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