After weeks of speculation that U.S. President Trump would "TACO" or chicken out, that did not happen. Just before the stock markets closed, the President announced a grace period for Mexico. However, Canada (EWC) now faces a 35% tariff, up from 25%.
Even South Africa and Switzerland face a lower rate of 30%.
The 35% tariff rate does not start on August 1. Instead, it will start seven days after. This suggests that the U.S. is open to negotiations between now and before August 7.
Mexico (EWW) must contend with a 25% tariff rate. This is subject to change, as negotiators still have a week to make an offer.
Taiwan, a key exporter of artificial intelligence chips, faces a 20% tariff rate.
The White House reaffirmed previously announced rates of 10% on the United Kingdom, 19%-20% on Southeast Asian nations, and 15% on the European Union, Japan, and South Korea.
American firms that import foreign goods will pay for these tariffs if they want to accept the goods. Sellers must decide how much of this cost they will pass to consumers. Goods with elastic demand would suffer from falling sales if prices rise by the tariff amount. Must-have items (inelastic demand) are fine.
The tariff announcements follow a hasty implementation of 50% tariffs on copper. However, this applies to self-finished copper. This news sent Freeport-McMoRan (FCX) down by nearly 10% in the last week.
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