After a Rollercoaster 90-day Ride, Trump's Tariff Date Arrives

The global economy, clouded by months of uncertainty stemming from Donald Trump’s shifting trade policies, is about to get a clearer picture as the former U.S. president’s 90-day pause on new tariffs nears its end on Wednesday.

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This deadline marks the conclusion of a temporary truce on Trump’s so-called “reciprocal” tariffs, paving the way for the protectionist measures he argues will reduce U.S. trade deficits and revive domestic manufacturing. His use of unilateral tariffs is shaking the foundations of a long-standing global system that promoted trade liberalization under the rules of the World Trade Organization.

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Trump isn’t just disrupting trade norms — his tariffs are also expected to generate significant revenue for the federal government, helping offset concerns about growing debt levels following a massive $3.4 trillion tax-and-spending initiative enacted by Congress. “The money will start to come into the United States on Aug. 1,” Trump declared, referencing the expected start date for the new tariffs.

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As the July 9 deadline looms, negotiators are working frantically to finalize trade agreements. Treasury Secretary Scott Bessent emphasized that trade remains a central pillar of Trump’s economic strategy, alongside tax cuts and deregulation.

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This agenda aims to unlock business investment, job creation, and innovation. So far, key economic indicators remain solid: hiring continues at a healthy pace, and inflation is relatively contained. Still, the Federal Reserve remains cautious about the potential economic fallout from tariffs, preferring to monitor the impact before considering interest rate cuts, despite Trump’s ongoing pressure for lower rates.

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Trump’s aggressive push to overhaul trade policy has introduced significant uncertainty for markets and corporate supply chains. Businesses are struggling to anticipate the consequences for production, inventory management, hiring, inflation, and consumer demand, especially given the unpredictable nature of the tariff rollout — sometimes implemented overnight, sometimes delayed.

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Despite his enthusiasm for tariffs — a word he’s famously called his favorite — Trump’s grasp of their economic impact is debatable. He continues to suggest that foreign nations bear the cost of the duties he imposes, though in reality, U.S. importers are the ones who typically shoulder the burden. These companies must then decide whether to pass the added costs on to consumers, negotiate discounts with overseas suppliers, or absorb the losses through narrower profit margins.

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Economics estimates that if the proposed tariffs take effect on July 9, the average duty on U.S. imports could spike to roughly 20%, a substantial leap from about 3% before Trump took office. Such an increase could pose further challenges to the U.S. economic outlook, compounding other risks already in play.

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In the week ahead, global markets will also be closely watching a host of economic developments. The Federal Reserve will release the minutes from its June policy meeting, which may provide insights into the timing and likelihood of future rate adjustments. Meanwhile, central banks across Asia — including those in Australia, New Zealand, South Korea, and Malaysia — are expected to make key monetary policy decisions based on recent inflation data and economic growth concerns.

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In Australia, the Reserve Bank is widely expected to cut its benchmark interest rate to 3.6% on Tuesday, its third straight reduction as inflation shows signs of easing. Supporting data from the NAB business confidence index and ANZ job ads will help gauge economic sentiment. RBA Deputy Governor Andrew Hauser is also scheduled to deliver a speech on Wednesday.

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New Zealand’s central bank is expected to hold its policy rate steady at 3.25%, while Bank Negara Malaysia is also predicted to leave its overnight rate unchanged. On Thursday, the Bank of Korea is likely to keep its key rate at 2.5%, as it balances economic support against concerns over rising property prices in Seoul.

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In China, inflation figures are due midweek, with subdued price pressures anticipated. Analysts will also scrutinize data on loan growth and money supply. Japan, meanwhile, will release labor earnings and other economic reports, while countries like the Philippines, Taiwan, and Indonesia are also scheduled to publish key indicators, including employment and trade data.

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Turning to Europe, the UK’s GDP data for May is expected to show modest growth following April’s sharp decline. The Bank of England will release its Financial Stability Report, followed by a press briefing from Governor Andrew Bailey. In the eurozone, markets will analyze manufacturing and export data from Germany, France, and Italy to assess the impact of tariffs on the region’s industrial activity.

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Few European Central Bank officials are slated to speak, though Bundesbank President Joachim Nagel will make an appearance, as will Executive Board member Piero Cipollone. Finance ministers are also meeting to finalize Bulgaria’s adoption of the euro starting in January.

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In Scandinavia, Sweden’s inflation numbers, house prices, and GDP indicator are all due. Denmark and Norway will release their own consumer-price data, while in Russia, officials will monitor inflation ahead of the central bank’s next interest rate decision. The Bank of Russia is considering a larger-than-usual cut, after making its first rate reduction in almost three years last month.

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In Latin America, inflation will be in focus across four of the region’s five largest economies. Colombia begins the week with data expected to show inflation dropping below 5% — its lowest level since October 2021. Chile follows on Tuesday, with inflation likely to remain steady or slightly increase. Mexico will report on Wednesday, with expectations of a slight cooling, and its central bank will release meeting minutes on Thursday.

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Brazil will also publish inflation figures, which could breach the country’s new target after a rate hike in June. Finally, Peru’s central bank is expected to lower rates by a quarter point in its midweek policy meeting.

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With so many developments unfolding, from trade policy shifts in the U.S. to rate decisions across the globe, markets and policymakers alike are bracing for a pivotal week in the global economic landscape.

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