President Trump plans to impose tariffs ranging from 10% to 70% on countries without recent trade deals, and an extra 10% on BRIC nations, effective August 1. Despite the usual market reaction of uncertainty leading to selloffs, the S&P 500 is at an all-time high, with the VIX index showing subdued volatility. Analysts believe investors have grown accustomed to this uncertainty, which is perceived as the new normal. The Bloomberg Trade Policy Uncertainty Index has fallen, and Goldman Sachs highlights that the impact of tariffs on partner economies is minimal, not derailing global markets.
President Trump announced new tariffs of 10%-70% on countries that did not sign recent trade deals, with an additional 10% on BRIC nations set to take effect on August 1.
Despite threats of tariffs, the S&P 500 reached a record high, suggesting that investors view the current policy chaos and uncertainty as the new normal.
The Bloomberg Trade Policy Uncertainty Index has decreased even as Trump continues to introduce new tariffs, indicating diminishing market reactions to such policy announcements.
Goldman Sachs notes that, while tariffs may hurt U.S. consumers, the economic impact on trading partner nations is too small to significantly disrupt global markets.
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