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By Megan Leonhardt | Tuesday, July 8 Trading Sideways. Tariffs dominated headlines again today as the White House doubled down on its new Aug. 1 deadline for the so-called reciprocal tariffs while also calling for new sector-specific levies. Markets were not impressed. The Dow Jones Industrial Average dropped 166 points, or 0.4%. The S&P 500 was down 0.1%. The Nasdaq Composite was up slightly by 0.03%. During a cabinet meeting today, President Donald Trump called for up to 200% tariffs on pharmaceuticals and 50% tariffs on copper products. Copper futures jumped over 17% before pulling back slightly. The copper tariffs look more imminent, with Trump indicating that the drug tariffs were still a ways off. The president also said the U.S. would be sending a letter setting tariff rates on imports to the European Union this week. “We’re probably two days off from sending them a letter,” he said. If the administration lifts tariffs on EU imports to a threatened 50%, it would increase consumer prices by 0.4 percentage points, writes Sam Tombs, Pantheon Macroeconomics' chief economist But he expects a deal is likely. This all comes as the original July 9 deadline for the pause on individual country levies is set to expire. Trump issued an executive order on Monday night giving all countries the new Aug. 1 deadline to cut a deal before the new rates take effect. In a likely bid to tamp down the recent TACO (Trump Always Chickens Out) critiques, the president reiterated today that the new deadline wouldn't be extended. Investors are likely better off ignoring Trump’s latest tariff announcements. "Our base case remains that, in aggregate, U.S. effective tariff rates will remain around their current levels," writes Jonas Goltermann, deputy chief markets economist for Capital Economics. "While continued noise around tariffs could well generate some volatility in the near term, we think the bar for another major sell-off remains quite high." 
DJIA: -0.37% to 44,240.76 The Hot Stock: Moderna +8.8% Best Sector: Energy +2.7% 
Tariff Today, Gone Tomorrow? Beyond Trump's calls on copper and pharma products on Tuesday, the administration sent letters this week to more than a dozen countries setting the stage for “Liberation Day déjà vu," as Yuri Seliger, credit strategist at Bank of America Securities, calls it. The Budget Lab at Yale released a new analysis of the trade deal with Vietnam, as well as the effects of Trump’s new levies on 14 countries announced Monday that range from 25% to 40%. Those tariffs are set to start on Aug. 1 unless the individual nations can cut deals with the administration. The researchers found that the economic consequences of the latest trade moves won’t be as hefty as expected when Trump first announced the so-called reciprocal tariffs on April 2. But taken with the tariffs already implemented by the administration this year, the latest proposals are still likely to create an additional drag on economic and job growth. If none of the 14 countries manage to seal preliminary trade deals and the proposed tariff rates go into effect in perpetuity, the Yale researchers estimate that consumers would face an overall average effective tariff rate of 17.6%. That’s the highest rate since 1934, and up from the 2.5% rate in 2024. All of the 2025 tariffs, including the July 7 announcements, would create a drag of 0.7 percentage points on inflation-adjusted gross domestic product growth for the remainder of the year, the Yale researchers calculate. The unemployment rate is projected to rise 0.4 percentage point by the end of 2025. Unemployment was 4.1% in June. Payroll gains are expected to be 538,000 lower than otherwise expected for the year. The tariffs to date in 2025 would raise $2.6 trillion in revenue over 2026-2035, the researchers estimate. The nonpartisan Yale Budget Lab was co-founded by former Biden administration officials. But like much of the tariff announcements so far, these individual country rates are far from guaranteed. In fact, economists at Goldman Sachs wrote on Tuesday that they don't generally expect these rates to take effect. Seven months into 2025, tariffs remain as much a wild card as they did in January. 
The CalendarThe White House’s 90-day reciprocal tariff pause ends tomorrow. So far the U.S. has announced trade deals with the United Kingdom and Vietnam, as well a truce with China, giving more time for discussions. The Federal Reserve releases the minutes from its mid-June monetary-policy meeting. At that meeting the FOMC left the federal-funds rate unchanged at 4.25% - 4.5%. The central bank has been on hold since last December and looks set to take the summer off as another solid jobs report released last week pushed traders to price in almost no chance of a rate cut at the late-July meeting. 
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