Markets and economic observers got set Tuesday for another day of Trump trade activity, with a growing question being when long-promised deals would materialize.
Trump began the week promising a mix of “Letters, and/or Deals” but with only the former in evidence so far after he sent unilateral declarations of tariffs to 14 countries Monday that included a threat of 25% duties on South Korea and Japan beginning in August and some rates as high as 40%.
These numbers closely-tracked rates that were first promised in April (and rattled stocks at the time).
Then Trump Monday evening offered comments that didn't sound like a promised flurry of deals to lower rates are in the offing — at least in the next few days.
“We're close to making a deal with India” the president said during that dinner with Israeli Prime Minister Benjamin Netanyahu before immediately adding “others we've met with and we don't think we're going to be able to make a deal so we just send them a letter.”
The commentary is likely in part a negotiating ploy from the president as there is ample evidence that negotiations with both India and the European Union (EU) are making progress.
But it raised the question for markets as to whether this week will end up being more notable for market unfriendly moves instead of a mix of proverbial carrots (in the form of deals to lower rates from April levels) and sticks.
Trump‘s back and forth with reporters Thursday also saw the president liken his unilateral letters to deals and suggested he wasn't overly interested in additional negotiations this week.
“As far as I'm concerned, we're done,” the president said. When he was pressed at another point on whether the tariff rates he is offering could change before they go into effect in August, he added “I would say firm but not 100 percent firm.”
The overall context, as Ed Mills of Raymond James put it, could be that markets will have to contend with “a near-term trade escalation” in the coming days as negotiation timelines shift toward the end of the month.
That will “continue to drive trade-related market uncertainty given the shifting deadlines.”
“We read Trump's choice to reiterate the threat of Liberation Day numbers as a hawkish signal,” added Tobin Marcus of Wolfe Research in another note.
“Investors might just totally discount these threats,” he added, ”but it's not hard for us to imagine some of these tariffs taking effect.”
Trump's comments appeared to undercut some of his aides — Treasury Secretary Scott Bessent had said just hours earlier on CNBC “we are going to have several announcements in the next 48 hours” — but evidence remained ample that progress could be announced in the coming hours and days.
