Jul 14, 2025 (Baystreet.ca via COMTEX) --
Deeply frustrated and impatient that trading partners did not negotiate on trade deals, U.S. President Trump posted letters to the European Union and Mexico (EWW) on his platform. The letters call for 30% tariffs on those countries.
Since Liberation Day on April 3, stock markets called the tariffs a bluff. The U.S. paused the duties at the time. This time, the latest set of letters sets August 1 as their start.
Stock markets showed complacency. Nvidia (NVDA) led the technology sector (QQQ) higher. It closed at a $4 trillion market capitalization. This strengthened the Nasdaq, S&P 500 (IVV), the Dow Jones, and the small-cap (IWM) sector.
Treasury bonds with longer term durations, like the 7-10 year (IEF) and 20+ year (TLT), showed weakness. TLT stock is at risk of falling below $84. The U.S. approved government spending that would add $3 trillion to its debt. It cut Medicaid to offset income lost from taxes. Centene (CNC) and Oscar Health (OSCR) fell sharply. Molina Healthcare (MOH) lost 25% of its value in the last month.
No Panic
Markets are betting that the latest tariff rates are a threat. They are not pricing it for the U.S. to enforce it next month. Exercise caution in case the threat becomes a reality. Reduce positions in banks like Bank of America (BAC) and Citigroup (C). Banks underperform when tariffs slow global trade, hurting the economy.
COMTEX_467322742/2559/2025-07-14T09:57:47
