**Trump’s** Tariff Threats Roil Markets, Sparking Debate

Despite tariff announcements from **President Trump**, Wall Street has largely shrugged off concerns, with stocks climbing recently even as trade policies remain uncertain. The market’s resilience contrasts sharply with the sharp drop observed in April after similar tariff threats.

Market’s “Crazy Dance” with Tariffs

After **Trump** initially threatened high tariffs in early April, Wall Street’s stock values plummeted nearly 12% within a week. This financial market turbulence led **Trump** to temporarily back down, postponing the tariffs and initiating a 90-day negotiation period.

Since that low point in April, the S&P 500 has rebounded, increasing by 26%. **Trump** views this market recovery as validation of his approach to reshaping global trade.

“Risk is forming, and **Trump** now has a sense of invincibility and is willing to take a more aggressive stance on tariffs than anyone expected because he seems to really believe he can do anything without being punished,” one analyst noted.

New Tariffs Loom

Since extending the suspension of reciprocal tariffs on July 7, **Trump** has issued over 20 tariff-related letters, including notifications to leaders in Mexico and the EU. These letters announced a new 30% tariff on goods imported from Mexico and the EU, set to take effect on August 1, though diplomatic mediation remains possible before then.

While the S&P 500 experienced a slight dip of 0.3% yesterday, its overall performance for the week remained relatively stable.

**David Kotok**, a strategy consultant at Cumberland Advisors, stated, “What **Trump** says doesn’t matter, because he won’t do what he says in the end. Do we like it? Don’t like it… Do we have to accept it because there is no choice? Yes.”

Economic Factors at Play

Despite the constant stream of tariff-related news, some investors remain optimistic, drawing confidence from the resilience of the U.S. economy. For example, new data shows that the U.S. trade deficit decreased to $67.4 billion in May 2025, signaling some economic strength (U.S. Bureau of Economic Analysis).

In May, the US Consumer Price Index (CPI) annual growth rate was 2.4%, which is lower than the 3% rate when **Trump** assumed office. Additionally, the US economy added 147,000 non-farm jobs last month, signaling continued expansion.

However, this period of low economic shock may be temporary. Goldman Sachs economists have cautioned that tariffs alone could increase inflation by one percentage point this year.

In addition to broad tariff adjustments, **Trump** has also targeted specific industries, recently announcing a 50% tariff on imported copper starting August 1, with potential tariffs on drugs and semiconductors in the future.

“If the market feels that tariff turmoil is causing harm to the economy, **Trump** will be challenged again and be forced to give in,” said **Ed Yardeni**, president of Yardeni Research Inc. “This is a crazy dance between the market and **Trump**.”