Sign in Subscribe
Tariffs

Trump Vows to Impose Steep Tariffs on Aug 1, Despite Skepticism from Wall Street

Strategic Insights

— 2 min read

As the US President Donald Trump vowed to impose steep tariffs on dozens of countries by the start of next month, Wall Street signalled skepticism over whether he would follow through with his protectionist agenda. Despite Trump's promise to implement planned duties without further delay, the markets have taken the news in stride, with the S&P 500 index up 6 per cent this year and trading near record highs. However, analysts are still cautious, noting that the administration's shifting tariff policy has generated "large uncertainty".

Key Takeaways:

  • Trump has vowed to impose steep tariffs on dozens of countries, including Japan, South Korea, and South Africa, by August 1, despite a history of delays.
  • The US Treasury secretary, Scott Bessent, has stated that higher tariffs could raise more than $300bn in revenue for the US administration this year.
  • The S&P 500 index has risen 6 per cent this year and is trading near record highs, with analysts noting that the market has taken the news in stride.
  • The administration has hinted that tariffs revenue would rise after new tariffs take effect in August, with Bessent stating that the US has taken in "about $100bn" in revenue so far this year.
  • Analysts, including those from Goldman Sachs and Bank of America, have lifted their targets for the S&P 500, forecasting that the index will rally 11 per cent and 6 per cent respectively over the next 12 months.
  • Japan and South Korea have signaled that they would try to negotiate down the US tariffs, while the EU has suggested that it hopes to reach a temporary deal with the US to keep tariffs at 10 per cent.
  • Trump has promised to send more letters warning of tariffs to additional countries in the "next short period of time".

Statistics:

  • The US Treasury secretary has stated that higher tariffs could raise more than $300bn in revenue for the US administration this year.
  • The S&P 500 index has risen 6 per cent this year.
  • The US has taken in "about $100bn" in revenue from tariffs so far this year, with the higher tariffs taking effect in the second quarter.
  • Analysts have forecast that the S&P 500 will rally 11 per cent and 6 per cent respectively over the next 12 months.
  • The administration has hinted that tariffs revenue would rise after new tariffs take effect in August.

Sources:

  • "Donald Trump has vowed to impose steep tariffs or wrap up trade deals for dozens of countries by the start of next month", Washington Kate Duguid -- New York (Source: Financial Times)
  • "Scott Bessent, US Treasury secretary, said higher tariffs could raise more than $300bn in revenue for the US administration this year", (Source: Financial Times)
  • "The US has pushed back the worst-case scenario on tariffs so many times that there is no reason to believe this time will be any different", Ajay Rajadhyaksha, global chair of research at investment bank Barclays (Source: Financial Times)
  • "The S&P 500 index is up 6 per cent this year and is trading near record highs", (Source: Financial Times)
  • "Goldman Sachs and Bank of America strategists have lifted their targets for the S&P 500, forecasting that the index will rally 11 per cent and 6 per cent respectively over the next 12 months", (Source: Financial Times)

Read more