It’s only two more weeks until Trump’s big trade deadline

We’re now just 14 days away from Trump’s big trade deadline of 9 July. For all the scare and fear perpetuated across markets from January to March, April and May have proved to be vastly different narratives when it comes to viewing Trump’s trade policies. Tariffs are still the major talking point but Trump has not dropped the hammer on that, at least not in a all hell breaks loose manner.

As things stand, all we’ve gotten is about half a trade deal with the UK. And that’s about it.

The US is seeing no real progress in negotiations with other closer allies such as India, Japan, and South Korea. And there continues to be sticking points with China and the EU especially.

The good news for now is that we’ve seen how Trump plays his cards at the table. It’s all about talking up a big game but when it is time to walk the talk, he backtracks. In other words, TACO all the way.

And that is what markets are still feeding off in the past few weeks, not withstanding the geopolitical drama from Iran and Israel.

For the time being, Trump looks to be able to get away with 10% blanket tariffs across the board. And that is separate from the steel and aluminum tariffs and the ones on autos, which are also major sticking points for the likes of EU and Japan respectively.

Despite not walking the talk just yet, he managed to hoodwink the world into accepting 10% tariffs as being a good thing. That’s quite a feat on its own, regardless of what you want to say about the man.

And as he still needs to deal with the trade situation with so many other countries, the trade war with China is being put on ice at least. That will keep markets in a better mood until things start to unravel again. It’s a question of when and not if, for that to happen of course.

But as we look to the 9 July trade deadline, the baseline expectation is that Trump will reaffirm the TACO trade once more. And that is to kick the can down the road as we’ve seen before.

So long as countries are still showing some intentions to negotiate with the US, markets seem to be coming around to the idea that there will be an extension to the deadline for a deal. There might be some countries that might not be spared from his wrath but we’ll have to see who and what extent he wants to push with tariffs if that does happen.

And even then, who’s to say that he won’t back down and pull back after the decision is made. It has happened before and we can’t rule that out from happening again. Welp, down the road we go again.

This article was written by Justin Low at www.forexlive.com.