Trump's tariffs 'not going away' as deadline for deals loom, top adviser says

Commerce Secretary Lutnick indicated that President Trump intends to reinstate sweeping global tariffs when the 90-day pause expires in early July, potentially impacting approximately 60 trading partners. This stance coincides with increased tariffs on steel and aluminum imports, now at 50%, and ongoing trade tensions with China, despite a trade truce established in Geneva. Treasury Secretary Bessent accused China of disrupting global supply chains, while White House officials suggested a potential call between Presidents Trump and Xi this week to address trade concerns, highlighting the administration's readiness to act if negotiations fail.

Analysis

The US administration, as per Commerce Secretary Howard Lutnick, intends to allow the 90-day pause on sweeping global tariffs to expire in early July, reinforcing its firm stance on a trade agenda that has already seen US tariffs on steel and aluminum imports double to 50% from 25%, effective this Wednesday. This move is anticipated to reimpose tariffs ranging from 11% to over 100% on approximately 60 trading partners, including the European Union, Vietnam, and South Africa, deemed "worst offenders" by the White House, with the stated aim of rectifying perceived unfair trade policies and bolstering domestic industries such as steel. Despite ongoing court challenges, officials assert that "tariffs are not going away." Relations with China remain particularly strained; Treasury Secretary Scott Bessent accused Beijing of being an "unreliable partner" by allegedly disrupting global supply chains through withholding essential products. While a May trade truce in Geneva led to reciprocal tariff reductions (US tariffs on Chinese goods fell from 145% to 30%, and China's retaliatory tariffs on US goods from 125% to 10%), a comprehensive deal remains elusive. A potential call between President Trump and Chinese President Xi Jinping is expected this week to "iron out" details, yet officials like National Economic Council Director Kevin Hassett underscore the administration's readiness for escalation if talks fail, emphasizing the strategic necessity of a robust domestic steel industry for national defense. The prevailing moderately negative sentiment (-0.5), hawkish tone, and high market impact score (0.8) signal significant potential for market disruption from these developments.

Key Decisions for Investors

• Anticipate heightened market volatility and supply chain disruptions as the US tariff pause expires in early July, particularly for companies with significant exposure to international trade with the US, China, and the EU, or those dependent on steel and aluminum imports.
• Investors should closely monitor the outcome of the anticipated Trump-Xi call and any subsequent trade negotiations, as these will be key determinants of near-term market direction and sector-specific impacts, with potential new tariffs ranging from 11% to over 100% on a wide array of goods.
• Given the administration's unwavering stance on tariffs, the recent doubling of steel and aluminum duties to 50%, and the high market impact score, consider reviewing portfolio allocations to mitigate risks in sectors most vulnerable to escalating trade tensions and potential retaliatory measures.