The Trump administration has introduced a fresh round of tariffs on 60 trading partners, including the European Union, China, the U.K. and Canada, reviving trade tensions at a moment when global markets are already dealing with elevated uncertainty. The new duties, which took effect at 12:01 a.m. ET on Friday, replace a temporary 10% baseline tariff that expired on July 24 and are set between 10% and 12.5%.
Market reaction was relatively restrained, reflecting expectations that a new tariff move was likely once the previous measures ran out. That is a sharp contrast with the April 2025 “Liberation Day” announcement, which hit investors with a far bigger surprise and triggered a much steeper selloff. Even so, analysts say the latest wave is arriving in a more fragile economic environment, with the Middle East conflict continuing to unsettle energy markets and oil prices rebounding above $100 this week.
Different legal route, different market risk
According to the report, the new tariffs are being pursued under Section 301 of the Trade Act of 1974 after the Supreme Court ruled in February that the earlier tariffs were illegal. Officials say the latest duties are tied to alleged forced labor practices. Countries that have adopted or committed to introducing prohibitions face a 10% duty, while those that have not will face 12.5%. Together, the measures affect 99.4% of U.S. imports.
Investors and strategists argue that the bigger issue for the Eurozone and other markets is not just the size of the tariffs, but the broader setting in which they are being deployed. Portfolio managers and market watchers cited a backdrop of energy shocks, supply chain bottlenecks, renewed conflict in the Middle East and concerns about heavy technology spending. Some warned that repeated tariff action could become a structural drag on growth, with a low-growth, high-inflation mix increasingly likely if trade tensions continue to build.
There is also a sense that the White House may be testing how much room it has to maneuver after limited retaliation so far and no obvious jump in inflation. That has led some analysts to think other countries may respond cautiously at first, waiting for a clearer picture of the economic impact before deciding whether to escalate. For European markets and the ECB, the concern is that another round of trade friction could add to already complicated inflation and growth dynamics.
Source: cnbc.com
