Markets' 90-day tariff pause rollercoaster nears an uncertain end

2025-07-05 GGAMen游戏资讯 3

Key Points

Research suggests the 90-day tariff pause, ending July 9, 2025, has caused market volatility, with the S&P 500 near record highs at 6,279.35 but facing uncertainty.
It seems likely that if tariffs are reinstated, ranging from 11% to 50%, it could lead to higher inflation and reduced consumer spending, though trade deals might mitigate this.
The evidence leans toward increased market anxiety, with European shares falling nearly 1% on July 4, 2025, and potential impacts on sectors like technology and consumer goods.
There is controversy over U.S. protectionism, with critics arguing it could isolate allies and strain global trade, while supporters see it as necessary for economic security.

Market Context

The 90-day tariff pause, agreed upon by the U.S. and China, temporarily halted tariffs to ease trade tensions, but its end is creating uncertainty. The S&P 500 has shown resilience, trading at 6,279.35 on July 4, 2025, near its all-time high, driven by positive economic indicators like strong jobs data.

Potential Outcomes

If no trade deals are reached, tariffs could jump, potentially increasing costs for consumers and businesses. However, ongoing negotiations, such as a rare earth minerals deal with China, offer hope for extensions, which could stabilize markets.

Investor Considerations

Investors are advised to monitor developments closely, as the outcome on July 9, 2025, and legal rulings by July 31, 2025, could significantly impact market direction. Sectors like technology and consumer goods may face higher risks if tariffs are reinstated.

Comprehensive Analysis: Markets' 90-Day Tariff Pause Rollercoaster Nears an Uncertain End

As of 08:14 AM PDT on Friday, July 4, 2025, the global financial markets are experiencing heightened uncertainty as the 90-day tariff pause, agreed upon by the U.S. and China, expires on July 9, 2025. This pause, which began on April 9, 2025, temporarily halted reciprocal tariffs ranging from 11% to 50% on various goods, providing a brief respite from escalating trade tensions. However, with the deadline approaching, markets are bracing for potential volatility as the outcome of trade negotiations remains unclear. Below is a detailed examination of the situation, including market reactions, potential outcomes, and broader economic implications.

Background and Context

The 90-day tariff pause was initiated on April 9, 2025, following intense trade negotiations between the U.S. and China, aiming to reset short-term market risk and allow for further discussions. This pause was part of a broader effort by the Trump administration to revamp trade policies, focusing on protectionism and bilateral deals. The pause covered tariffs on imports from multiple countries, including China, the EU, Canada, and Mexico, with specific rates varying by sector and country.

Key Details of the Tariff Pause and Its End

Ending Date: The pause ends at 12:01 AM EST on July 9, 2025, marking the deadline for trade agreements to avoid tariff reinstatement.
Tariff Rates Post-Pause: If no deals are reached, reciprocal tariffs ranging from 11% to 50% will be reinstated. Current effective tariff rates include:

A universal tariff of 10% under the International Emergency Economic Powers Act (IEEPA) for most countries, effective since April 5, 2025.
25% on autos and auto parts since March 5, 2025.
Up to 55% on Chinese goods, including legacy tariffs under Section 301, with a base tariff of 30% since May 14, 2025.
25% for non-USMCA-compliant goods from Canada and Mexico, and 10% for non-USMCA-compliant energy and potash.

Trade Deals and Extensions:

China: A framework deal for rare earth mineral exports has been finalized, but the effective tariff remains at 55%, with a deadline of August 12, 2025, for further details.
Canada: An extension until July 21, 2025, was secured after Canada scrapped its Digital Services Tax, providing temporary relief.
EU: There is a threat of tariffs increasing to 50% from 20% if no deal is reached, with EU retaliation set to begin on July 14, 2025. Discussions include a potential 10% universal tariff.
Japan: Tensions are rising over potential car tariffs, with Japan expressing concerns about U.S. unilateral tariff rates, potentially leading to retaliatory measures.

The following table summarizes the current and potential tariff rates:

Country/Sector	Current Effective Tariff Rate	Potential Post-Pause Rate (If No Deal)
World (IEEPA Universal)	10% (since April 5, 2025)	11%-50%
Autos & Auto Parts	25% (since March 5, 2025)	Up to 50%
China	Up to 55% (base 30% since May 14)	Up to 55% (includes legacy tariffs)
Canada/Mexico (Non-USMCA)	25% (goods), 10% (energy/potash)	Up to 50%
EU	20% (current threat)	Up to 50% (if no deal)

Market Reactions and Current Status

The markets have been on a rollercoaster since the announcement of the tariff pause, with initial surges followed by fluctuations and now, as the deadline approaches, a mix of record highs and concerns:

Initial Surge: On April 9, 2025, global equities, including the S&P 500, surged, with the S&P 500 jumping 5.6% and the Nasdaq rising over 8%, reflecting relief from escalating trade tensions. The Guardian: S&P 500 sees one of the biggest days since the Second World War after ....
Subsequent Volatility: As the pause period progressed, markets experienced fluctuations. For instance, on April 10, 2025, the S&P 500 fell more than 3%, and the Nasdaq lost over 4%, as initial euphoria faded and uncertainty set in. NPR: U.S. stocks fall as euphoria over Trump's tariff pause fades.
Recent Performance: By June 27, 2025, the S&P 500 and Nasdaq had rebounded to all-time highs, driven by a resilient U.S. economy, positive jobs data, and hopes of a favorable trade outcome. Wikipedia: 2025 stock market crash. As of July 4, 2025, the S&P 500 is trading at 6,279.35, just below its record high of 6,284.65 set on July 3, 2025, indicating resilience despite the looming deadline. Yahoo Finance: S&P 500 (^GSPC) Charts, Data & News.
Recent Market Movements: European shares fell nearly 1% on July 4, 2025, as investors weighed uncertainty over U.S. trade deals ahead of the July 9 deadline, reflecting global concerns. Reuters: European shares fall as US tariff deadline looms. Citi warned that markets risk being caught offside if tariffs are reimposed at 20% or reach 50%, highlighting the unpredictability of President Trump. Reuters: Markets' 90-day tariff pause rollercoaster nears an uncertain end.

Sector-Specific Impacts

The potential reinstatement of tariffs could have varying impacts across sectors:

Technology: Companies like Nvidia, nearing a $4 trillion market cap, may face higher costs for imported components, potentially affecting margins. However, the sector has been a driver of recent market gains, with a 6% increase in 2025. Yahoo Finance: Stock market today: S&P 500, Nasdaq leap to fresh records as ....
Consumer Goods: Sectors tied to imports, such as autos and electronics, face higher risks, with potential cost increases passed on to consumers, possibly reducing demand. Bloomberg: Traders Fear Missing Out on Stock Market Gains More Than Tariffs.
Energy and Materials: Industries like copper and critical minerals could see price increases due to higher tariffs, impacting manufacturing and construction, with potential ripple effects on inflation. ING Think: Everything you need to know as we near the end of the US 90-day tariff pause.

Investor Sentiment and Risks

The market is currently in a state of limbo, with investors awaiting clarity on whether tariffs will be reinstated or if trade deals will be finalized:

Uncertainty and Volatility: The uncertainty has led to increased market volatility, with recent analyses suggesting that if tariffs hit, inflation could tick up, potentially stalling Fed rate cuts Reddit: What's the play if Trump's 90-day tariff freeze ends July 9 .... This could impact sectors sensitive to interest rates, like real estate and utilities.
Potential for Tariff Reinstatement: If tariffs are reinstated, they could lead to higher inflation, reduced consumer spending, particularly on imported goods, and potential delays in monetary policy easing. President Trump has suggested he may not extend the pause and is considering higher tariff levels (up to 70% for some goods), adding to market anxiety. Yahoo Finance: Trump tariffs live updates: Trump set to impose tariffs of up to 70% in ....
Geopolitical Tensions: The U.S. stance on tariffs is protectionist, with zero-for-zero deals off the table. This strategy may isolate China and pressure allies, leading to discontent and potential retaliatory measures from trading partners Hogan Lovells: Status of U.S. Bilateral Trade Negotiations as the July 9 Deadline .... This has raised concerns about a potential trade war flare-up, with global investors beginning to flee U.S. assets if tensions escalate NBC News: Trump's tariff pause is set to expire, threatening a trade war flare-up.

Broader Economic Context

The tariff situation is occurring alongside other significant economic developments:

Fiscal Policy: The Trump administration’s “One Big Beautiful Bill Act,” which includes tax cuts and spending measures, is expected to be signed into law soon. This could provide some cushion against tariff-related economic headwinds. It may also strain the Social Security trust fund, moving its exhaustion date from 2033 to 2032 [Washington Post: GOP tax bill includes a $6,000 ‘senior deduction.’ Here’s who gets it.]([invalid url, do not cite]).
Trade Policy: The U.S. is pursuing bilateral trade deals, focusing on protectionism, with tariff revenue to finance the new fiscal package. This has led to reshuffling global trade dynamics, with China expressing discontent over U.S. policies. ING Think: Everything you need to know as we near the end of the US 90-day tariff pause.
Global Impact: The uncertainty has not been limited to U.S. markets, with European shares falling nearly 1% on July 4, 2025, and Asian markets struggling, reflecting global concerns about the tariff situation. Reuters: European shares fall as US tariff deadline looms.

Legal and Political Considerations

Legal Rulings to Watch: The IEEPA tariffs are facing legal scrutiny, with a key court decision expected on July 31, 2025. A Supreme Court ruling on June 27, 2025, restricting nationwide injunctions could impact the outcome of this litigation, potentially affecting the enforceability of tariffs. ING Think: Everything you need to know as we near the end of the US 90-day tariff pause.

Conclusion

The 90-day tariff pause, set to end on July 9, 2025, has created a rollercoaster of market reactions, from initial surges to recent volatility. As of July 4, 2025, the S&P 500 is trading at 6,279.35, near its all-time high, but the market remains on edge due to the uncertainty surrounding the tariff outcome. If tariffs are reinstated, they could lead to higher inflation, reduced consumer spending, and potential delays in monetary policy easing. However, ongoing trade negotiations, such as the rare earth minerals deal with China, offer hope for extensions, which could stabilize markets. Investors closely monitor developments, with key dates including the tariff deadline on July 9, 2025, and the IEEPA legal ruling on July 31, 2025.

Key Citations