Markets Dip as Trump Signals Imminent Tariffs Ahead of Trade Deadline
Equity futures declined and the dollar slipped after President Trump announced his administration could begin issuing tariff warning letters to U.S. trading partners as soon as Friday.
Speaking to reporters ahead of the July 9 trade negotiation deadline, Trump said: “We’re probably going to be sending some letters out, starting probably tomorrow—maybe 10 a day—to various countries saying what they’re going to pay to do business with the U.S.”
Despite U.S. stocks finishing Thursday’s holiday-shortened session at record highs, investor sentiment took a hit from the president’s remarks. The S&P 500 has climbed 26% since its April low, buoyed in part by Trump’s earlier decision to walk back from steep tariffs announced on April 2 that had pushed levies to 131-year highs.
However, Trump’s latest comments suggest that meaningful trade agreements are unlikely before the deadline, reviving concerns about renewed tariff uncertainty.
Deutsche Bank strategist Jim Reid noted that Trump also mentioned potential tariffs could range from 10% to as high as 60–70% and may take effect on August 1. “That’s definitely one to watch, as the impact across economies would vary significantly depending on where those rates land,” Reid said.
While U.S. equity and bond markets are closed for Independence Day, futures trading remained active. The E-mini S&P 500 contract was down 0.6% early Friday, despite the passage of the Republican tax-cutting bill.
The dollar also weakened, falling 0.4% against the Japanese yen and 0.2% versus the euro.
Global markets mostly followed Wall Street’s strong close with caution. Countries seen as more exposed to Trump’s potential unilateral tariffs saw the sharpest losses: South Korea’s KOSPI dropped 2%, Germany’s DAX slid 0.8%, and France’s CAC 40 fell 1% by midday in Europe.
“Risk sentiment is draining from markets,” said Kathleen Brooks, research director at XTB. “President Trump seems to have ended the negotiating phase ahead of the July 9 deadline. At this stage, he looks more prepared to impose penalties than cut deals.”
The tariff threat also hit commodities. Copper futures dropped 1.7%, while oil fell 1.3%, amid fears that broader tariffs could suppress global trade and economic growth.
“Optimism is evaporating as the U.S. tariff deadline looms and signs point to steeper-than-expected duties for many countries,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The risk-off mood pushed bitcoin down 0.5%, while gold edged up 0.2% to around $3,350 per ounce.
