{"id":51154,"date":"2025-07-09T10:31:09","date_gmt":"2025-07-09T10:31:09","guid":{"rendered":"https:\/\/www.europesays.com\/us\/51154\/"},"modified":"2025-07-09T10:31:09","modified_gmt":"2025-07-09T10:31:09","slug":"extend-and-pretend-is-a-feature-not-a-bug-of-trade-policy","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/51154\/","title":{"rendered":"Extend and pretend is a feature, not a bug of trade policy"},"content":{"rendered":"<p>Following a tumultuous first half of the year in trade and financial markets, it\u2019s clear that never-ending changes in tariffs are a feature and not a bug of trade policy coming out of Washington.<\/p>\n<p>The extend-and-pretend deadlines on tariffs\u2014most recently those that were to have taken effect on Wednesday but have been delayed\u2014have turned into a perpetual moving of the goal posts that investors now discount.<\/p>\n<p><a href=\"https:\/\/realeconomy.wpenginepowered.com\/wp-content\/uploads\/2025\/07\/7_9_2025_MM_2.jpg\" target=\"_blank\" rel=\"noopener nofollow\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-26080 size-mailchimp-images\" src=\"https:\/\/realeconomy.wpenginepowered.com\/wp-content\/uploads\/2025\/07\/7_9_2025_MM_2-560x516.jpg\" alt=\"\" width=\"560\" height=\"516\"  \/><\/a><\/p>\n<p>One can observe that on display vividly as the White House threatened to lift copper tariffs by 50% and pharmaceutical products by as much as 200%. While that temporarily caused copper prices to spike, it had effectively zero impact on broader equity valuations, interest rates or the value of the dollar on Tuesday afternoon.<\/p>\n<p>One gets the sense that although sector tariffs remain a risk to the economic outlook, corporate margins and commodity prices, investors do not believe that they are going to turn over the economy at current levels or the long-term effective rate.<\/p>\n<p>Get Joe Brusuelas\u2019s Market Minute economic commentary every morning.<a href=\"https:\/\/realeconomy.rsmus.com\/subscribe-to-market-minute\/\" rel=\"nofollow noopener\" target=\"_blank\"> Subscribe now<\/a>.<\/p>\n<p>There is a real lesson there for the businesses that populate the real economy. And it\u2019s why equity valuations in recent months have been rising despite the threat of tariffs.<\/p>\n<p>Eventually, though, the laws of economic gravity will pull those valuations back to earth as firms\u2019 margins are compressed, inflation increases and real disposable incomes fall, especially in lower-income households.<\/p>\n<p><a href=\"https:\/\/realeconomy.wpenginepowered.com\/wp-content\/uploads\/2025\/07\/7_9_2025_MNM_1.jpg\" target=\"_blank\" rel=\"noopener nofollow\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-26081 size-mailchimp-images\" src=\"https:\/\/realeconomy.wpenginepowered.com\/wp-content\/uploads\/2025\/07\/7_9_2025_MNM_1-560x335.jpg\" alt=\"\" width=\"560\" height=\"335\"  \/><\/a><\/p>\n<p>The effective tariff rate, which stands near 11% for all trade partners, will most likely settle into a range between 15% to 17% with risk of a move to 20% or above.<\/p>\n<p>The two data visualizations provided here illustrate the scope of the trade taxes that will affect businesses and the overall economy.<\/p>\n<p>With such uncertainty swirling around the economy, it is incumbent upon firms of all sizes to budget for an elasticity of trade taxation until a clear policy is articulated.<\/p>\n","protected":false},"excerpt":{"rendered":"Following a tumultuous first half of the year in trade and financial markets, it\u2019s clear that never-ending changes&hellip;\n","protected":false},"author":3,"featured_media":51155,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[64,135,67,132,68],"class_list":{"0":"post-51154","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-markets","10":"tag-united-states","11":"tag-unitedstates","12":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114822819890463204","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/51154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=51154"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/51154\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/51155"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=51154"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=51154"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=51154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}