Key Takeaways
- The United States has announced a significant shift in trade policy, publishing detailed tariff codes under Section 232 for steel and aluminum items and planning to halt duty-free treatment under De Minimis rules effective August 29, 2025.
- Fitch Ratings has updated its estimate for the overall US Effective Tariff Rate (ETR) to 16%, reflecting rising USMCA compliance and other recent tariff changes, though earlier estimates had projected rates as high as 19.4% or even 23.7% under certain scenarios.
- US Net Long-Term Total International Capital (TIC) Flows saw a substantial decline in June, falling to $150.8 billion from a revised $266.8 billion in the previous period, with total net TIC flows at $77.8 billion (previously $318.1 billion).
- US major stock indices closed mixed, with the Dow Jones Industrial Average unofficially up 33.26 points (0.07%) at 44,944.52, while the Nasdaq fell 86.06 points (0.40%) to 21,624.61 and the S&P 500 declined 19.29 points (0.30%) to 6,449.25.
- Conflicting reports emerged regarding a high-level meeting, with Brazil's former President Bolsonaro tweeting about an "excellent meeting" with US Treasury Secretary Scott Bessent on August 13, while Brazilian officials stated the meeting was cancelled.
The United States is implementing notable changes to its trade landscape, with new tariff measures and the impending suspension of De Minimis duty-free rules. Detailed tariff codes have been published under Section 232 for steel and aluminum items, broadening and increasing existing duties, with some tariffs on steel and aluminum imports rising to 50% for most countries as of June 4, 2025. Additionally, a planned halt of duty-free treatment for low-value shipments under De Minimis rules is set to take effect on August 29, 2025, subjecting goods valued at $800 or less to applicable duties. This move is expected to impact e-commerce and low-value imports, with the White House citing a "skyrocketing" volume of de minimis shipments and significant lost revenue.
Fitch Ratings has adjusted its estimate for the overall US Effective Tariff Rate (ETR) to 16%, a figure that reflects ongoing changes in trade policy and rising USMCA compliance. Earlier in July, Fitch had projected the ETR could jump to 19.4% from 14.1% with new reciprocal tariffs and copper duties effective August 1, 2025, and potentially reach 23.7% if additional 25% tariffs on semiconductors and pharmaceuticals were implemented.
In economic data, US Net Long-Term TIC Flows for June experienced a significant decrease, coming in at $150.8 billion, down from a revised $266.8 billion in the prior period. Total Net TIC Flows also saw a sharp decline to $77.8 billion from a revised $318.1 billion. Separately, the Federal Reserve's weekly H.8 release, providing data on the Assets and Liabilities of Commercial Banks in the United States, is now available. This report offers an estimated weekly aggregate balance sheet for all commercial banks, disaggregated into various bank groups.
On the diplomatic front, conflicting reports surfaced regarding a high-profile meeting. Brazil's former President Jair Bolsonaro stated on social media that he had an "excellent meeting" with US Treasury Secretary Scott Bessent on August 13. However, Brazilian Finance Minister Fernando Haddad reported that a scheduled virtual meeting between himself and Secretary Bessent for the same date was cancelled, attributing it to "coordinated efforts of the far-right in the US" or a "lack of availability." This cancellation comes amidst ongoing tensions over 50% US import tariffs imposed on various Brazilian goods, which Brazil's President Luiz Inácio Lula da Silva has indicated will not be reciprocated.
US stock markets closed with mixed results. The Dow Jones Industrial Average concluded the day up 33.26 points, or 0.07%, at 44,944.52. In contrast, the Nasdaq finished down 86.06 points, or 0.40%, at 21,624.61, and the S&P 500 closed down 19.29 points, or 0.30%, at 6,449.25.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.