President Donald Trump announced on Sunday that he will delay imposing 50% tariffs on the European Union until July 9. The news comes after Trump’s tariff threats against the EU caused U.S. stocks to drop slightly on Friday, although the market reaction was less severe compared to previous tariff-related drops. Trump also stated that Apple would have to pay a tariff of 25% or more for iPhones made outside the U.S. On Friday, the president approved the merger of U.S. Steel and Nippon Steel.
Investors are closely watching Nvidia’s first-quarter earnings report, set to be announced on Wednesday, and the U.S. personal consumption expenditure index, which will be released on Friday. If Trump follows through with his 50% tariffs on the European Union, he would be imposing higher duties on America’s ally compared to current rates. However, the president’s decision to delay the tariffs followed a call with the European Commission President.
Trump delays EU tariffs briefly
When the news of the tariffs first broke, analysts were skeptical of Trump’s statement, interpreting the use of “recommendation” as a proposal rather than a clear directive. Trump has walked back on tariff pledges in the past.
Major U.S. and European stock indexes did not have a sharp reaction to Trump’s announcement of EU tariffs, indicating that investors are beginning to take tariff-related announcements with a grain of salt. Barclays noted that the proposed 50% tariff appears to be primarily a “negotiating tactic.”
Despite this, markets dropped for the week, with the S&P 500, Dow Jones Industrial Index, and Nasdaq Composite losing more than 2% during the period, as Treasury yields jumped. Even if investors are getting used to Trump’s tariff proclamations, there remains a lot more in the president’s arsenal to keep markets uncertain.
Zack Kass, a futurist and former head of OpenAI’s go-to-market strategy, emphasized AI’s potential in managing global supply chains and mitigating the effects of Trump’s tariffs at the Ambrosetti Forum in Italy last month. He stated, “Uncertainty from U.S. tariff measures may present an opportunity for AI to provide significant value.”
Several tech firms are already using artificial intelligence to instantly process changes in the U.S. customs system and make necessary adjustments to their supply chains.
