Tariffs announced in Canada, with EU tariffs anticipated for today
In a series of escalating moves, President Donald Trump has imposed new tariffs on Canada, Brazil, Japan, and South Korea, and threatened to impose 30% tariffs on Mexico and the European Union starting August 1, 2025 [2]. The European Union (EU) is actively responding to these threats by preparing countermeasures, including potential retaliatory duties and export restrictions [1].
The EU has launched public consultations on possible retaliatory duties targeting U.S. exports worth €95 billion, including aircraft, automobiles, medical devices, and IT equipment. They are also considering export restrictions on scrap metals and chemicals valued at €4.5 billion [1]. The EU has expressed readiness to defend its interests and warned that if no deal is reached by August 1, a full trade war could erupt [2].
The ongoing threats and retaliations are causing significant concern among world leaders and financial analysts. Markets are currently digesting these announcements, which are creating uncertainty and volatility. The ongoing trade tensions are seen as a serious blow to international trade relations, prompting investors to reassess risks in affected industries [2].
Here's a summary of the current tariff status and responses from the affected countries and regions:
| Country/Region | Tariff Status | Response | Market Reaction | |---------------------|-------------------------------------------|--------------------------------|--------------------------| | Canada, Brazil, Japan, South Korea | Tariffs imposed earlier this week | Not specified in detail | Market uncertainty | | Mexico, European Union | 30% tariffs threatened starting Aug 1, 2025 | EU preparing countermeasures, consultations ongoing | Concerns about trade war, market volatility | | United States | Intention to raise reciprocal tariffs to 15–20% and higher | Rules for tariff implementation updated | Markets digesting tariff announcements |
Despite the tariff threats and global uncertainty, the S&P 500 gained 0.3%, the Nasdaq Composite added 0.09%, the Russell 2000 was higher by 0.5%, and the Dow Jones Industrial Average added 0.4% [2]. However, it's advised to clean up portfolios and review positions heading into the weekend.
In other economic news, earnings season begins next week, with banking sector stocks set to report on Tuesday, led by Citigroup, JP Morgan, and Wells Fargo. Shares of Nvidia hit another all-time high and the company now sports a $4 trillion market cap. Delta announced better than expected year-over-year growth, sending its stock higher by 12%. Consumer sentiment, while having dipped earlier this year, appears to have recovered [2].
However, there is a question of whether the market is trading at these highs because of economic improvements or because it has gotten ahead of itself. With the potential for binary shock due to upcoming tariff news, it's crucial for investors to stay informed and adapt their strategies accordingly.
Sources: [1] Reuters. (2025, July 13). European Union considers countermeasures against U.S. tariffs. Retrieved from https://www.reuters.com/article/us-usa-trade-eu/european-union-considers-countermeasures-against-u-s-tariffs-idUSKBN25827X [2] CNBC. (2025, July 13). Trump threatens to impose 30% tariffs on Mexico and the European Union starting August 1. Retrieved from https://www.cnbc.com/2025/07/13/trump-threatens-to-impose-30-tariffs-on-mexico-and-the-european-union-starting-august-1.html
- The ongoing political tension, with President Trump imposing tariffs on several countries and the EU preparing countermeasures, has caused significant concern in the business world, potentially affecting AI companies such as Nvidia by creating market volatility and uncertainty.
- Amidst escalating tariff threats, the European Union has launched public consultations on potential retaliatory duties targeting U.S. exports worth €95 billion, which could extend to sectors like finance and technology, impacting businesses beyond just the automobile, aircraft, and IT equipment industries.
