President Trump marked the end of his 90-day “Liberation Day” tariff pause with a fresh barrage of threats, this time targeting Asia, commodities, and Big Pharma.
On Monday, Trump announced 25% tariffs on Japan and South Korea starting August 1. He also unveiled sweeping new levies on a range of developing countries: Indonesia (32%), Bangladesh (35%), and Thailand and Cambodia (36%).
Then came Tuesday’s cabinet meeting — nearly two hours long — where Trump pivoted to commodities and drug imports.
He vowed to slap a 50% tariff on copper and floated a 200% levy on pharmaceuticals, giving the drug industry 18 months to shift supply chains before enforcement begins.
Semiconductor tariffs, he added, are also on the way, but details are still unclear.
Markets were quick to react. U.S. copper prices surged 13% Tuesday, the largest one-day jump on record, according to Dow Jones Market Data.
Trump also went after the Fed, once again calling for Jerome Powell’s resignation, despite his own tariff threats being the very thing keeping Powell from cutting rates.
UBS: Not an escalation, just more noise
Despite Trump's loud and bold rhetoric, UBS analysts say markets shouldn’t read too much into the latest moves.
“The latest development does not constitute an escalation in the trade war, in our view,” wrote UBS analysts in a recebt research note.
UBS argues the new tariff levels are in line with April’s ‘Liberation Day’ rates, suggesting the goal is leverage, not escalation. Trump’s “escalate-to-de-escalate” strategy, they note, seems to be in full swing.
The administration, the bank added, appears to be leaving the door open for deals, a quiet admission that progress has been slower than advertised.
So far, Trump has inked just three handshake deals, well short of the 90 agreements in 90 days he once promised.
But there are signs of progress, nonetheless. Reuters reported Monday that the EU may be nearing a deal with the U.S. Trump has also teased progress with India.
With the original July 9 deadline likely pushed to August 1 — or even Labor Day — markets may be in for more volatility. But for now, UBS is calling Trump’s latest salvo what it is: more bark than bite.
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