North Korea Pledges Full Support for Russia’s War in Ukraine During Lavrov Visit

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

---

Wall Street is grappling with renewed uncertainty as President Donald Trump doubles down on aggressive tariff measures despite previous assumptions that he would eventually pull back, as he has in the past. The re-escalation of trade tensions comes at a time when markets had staged a remarkable rebound, pushing U.S. stock indices to record highs after the April slump triggered by Trump’s “Liberation Day” tariffs.

Trump is now using those very stock market gains to justify his continued push for higher trade barriers.

“I think the tariffs have been very well received. The stock market hit a new high today,” Trump said in an interview with NBC News on Thursday, touting a baseline tariff rate of 15%–20%, up from the current uniform rate of 10%.

This week, the White House issued a series of letters to major trading partners, outlining tariff schedules that could take effect by August 1 if no new trade agreements are reached. Trump even threatened 30% tariffs on goods from the European Union and Mexico, raising alarm bells among investors and global trade officials alike.

While many analysts previously believed Trump’s tactics were largely theatrical a strategy dubbed the “TACO trade” (Tariff Announcement, Correction, Optimism) the president’s latest moves are beginning to test that theory. Market reaction has been relatively subdued thus far, but signs of unease are beginning to surface.

Capital Economics warned on Friday, “Markets appear to believe that Trump will again back down. We are not so sure.”

Although Trump refrained from reimposing reciprocal tariffs on July 9, when a 90-day pause expired, the looming August 1 deadline provides only a narrow window for negotiations. Adding to the pressure, the administration announced new sector-specific duties, including a 50% tariff on copper and a staggering 200% potential tariff on imported pharmaceuticals.

Major financial institutions are sounding the alarm. JPMorgan CEO Jamie Dimon warned that markets may be underestimating the risks posed by escalating trade tensions. UBS echoed the sentiment, describing the growing divergence between investor optimism and Trump’s unpredictable trade strategy as a “paradox.”

Bank of America economists went further, describing the current dynamic as “the game that never ends.”

They pointed out that the lack of a strong market reaction could embolden the Trump administration to continue applying pressure, particularly since the earlier fears about consumer price inflation and recession have yet to materialize.

“But that creates a dangerous circularity,” Capital Economics noted, “since the main reason Trump shelved his Liberation Day tariffs in April was because of sharp sell-offs in both equity and Treasury markets. Without that market pressure, he may be more willing to follow through this time.”

As equity markets remain near record highs and consumer confidence appears largely unaffected, economists say the key question is how much more re-escalation financial markets can tolerate before reacting and how much volatility the White House is willing to endure.

In the absence of a definitive trade resolution, the standoff between Trump and the markets may continue to spiral caught in what analysts describe as “multiple equilibria,” where each side watches the other to determine the next move. For now, Wall Street is holding steady. But the stakes and the uncertainty are growing by the day.