The 90-day pause on President Donald Trump’s sweeping “Liberation Day” tariffs was supposed to expire on July 9. But before then, Trump announced that the pause would extend through Aug. 1. Since the original pause went into effect, Trump has forged a few trade agreements with major trading partners.
However, the president also recently sent letters to other countries letting them know what their new tariff rates will be on Aug. 1 if nothing else changes. Some of these tariff rates are quite high, equal to or not far off from the rates Trump initially set in early April.
Yet the market (as of July 11) isn’t far off from its all-time high, and it doesn’t seem to be poised for the same explosive sell-off that occurred in early April. Is the stock market underestimating Trump’s tariffs?