# The impact of the new US tariff policy on the global market, the direction of Federal Reserve policy is key.

Recently, news of the US significantly raising tariffs has caused market upheaval. According to the latest revealed information, the average tariff in the US in 2024 is only **2.5%**, but the new policy may impose a **10%** basic tariff on some countries, and with additional taxes, the **minimum tax rate may reach 20%**—equivalent to **8 times** the current level.

1. Japan and South Korea are the first to be hit, but there is room for negotiation.

The US has imposed **25%** tariffs on Japan and South Korea, slightly higher than expected by 5%, but not extreme. It is worth noting that there is still room for policy adjustment - if these countries are willing to further open their markets to the US or lower tariffs, the US may adjust tax rates accordingly. It is expected that **15%** could be the US's bottom line, but adjustments may be gradual, such as first lowering to **20%**, then gradually decreasing.

2. The market reacts strongly; Chinese tariffs remain the biggest variable.

The market is sensitive to tariff news, especially since the tax rates for Japan and South Korea are already quite high. The yet-to-be-announced tariff plan for China raises concerns among investors and may trigger greater volatility. However, there are positive signals: **The EU has expressed willingness to negotiate** and has reached a preliminary agreement with the US, with the minimum tax rate expected to remain around **20%**.

3. The Chinese issue is the most difficult, US Treasury yields soar.

Every piece of news regarding Chinese tariffs causes market turbulence. The latest impact is that **the yields on 20-year and 30-year US Treasuries have surpassed 4.9%**, indicating a rise in market risk aversion. This puts pressure on the Trump administration; the **Federal Reserve's stance will be crucial** moving forward.

4. Powell may not cooperate, and Trump may replace him.

Federal Reserve Chairman Powell may not easily cooperate with Trump's policy demands. In this case, Trump may accelerate the pace of **replacing the Federal Reserve leadership**. It is expected that after the full implementation of the tariff policy, the **nomination of the new Federal Reserve Chairman will be announced soon**.

Although Powell's term ends in **May 2026**, if his successor comes from the current Federal Reserve Board, Trump may plan ahead to place more supporters of his policies on the board. **The new chairman is likely to push for interest rate cuts** and stabilize market confidence through positive statements.

Summary: The tariff + monetary policy game, the market faces new challenges.

The US is responding to economic challenges with a combination of **'high tariffs + loose monetary policy'**, which will usher in a new wave of volatility in the global market. The key points to watch next:

1. The final implementation of China's tariff plan.

2. Is the Federal Reserve shifting towards interest rate cuts?

3. Will Trump replace the Federal Reserve Chairman early?

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The information and data sources mentioned in the content are derived from publicly available materials, striving for accuracy and reliability, but do not guarantee the accuracy and completeness of the information. The content does not constitute any investment advice, and investments made based on it are at your own risk!