Just when you thought the global trade stage might settle down for a quiet summer, former President Donald Trump has once again seized the spotlight, reminding everyone that when it comes to international commerce, predictability is for the faint of heart. In a move that has sent ripples, both predictable and perplexing, across financial markets, Trump has unveiled a fresh volley of tariffs, proving that his unique brand of economic diplomacy remains as potent – and as theatrical – as ever. The latest targets? Brazil and, for good measure, the very metal that conducts our modern world: copper.
The announcements, largely disseminated via the ever-reliable Truth Social platform, arrived with the usual Trumpian flourish. This isn’t just about trade imbalances; it’s about a grander narrative, often intertwined with geopolitical grievances and personal allegiances. The market, ever the stoic observer, is once again left to decipher the economic implications of what often feels like a global game of chess played with a very large, very blunt hammer. And as always, the question isn’t just “what’s next?” but “what *else* is next?”
The Brazilian Tango: Tariffs for “Justice”
Brazil, a nation perhaps accustomed to its own domestic political dramas, found itself thrust into the international trade spotlight with a hefty 50% tariff slapped on its goods, effective August 1. The stated reasons for this punitive measure were, shall we say, multi-faceted. Beyond the standard allegations of “unfair trade relationship” and “anti-American policies,” Trump explicitly cited the ongoing trial of former Brazilian President Jair Bolsonaro, a staunch ally, as an “international disgrace” and a “witch hunt.” He even went so far as to accuse Brazil of “insidious attacks on Free Speech Rights of Americans” related to social media platforms.
The market’s reaction in Brazil was swift and decidedly less amused. The Ibovespa (IBOV), Brazil’s main stock market index, tumbled 1.3% on July 9, closing at 137,481 points, directly after Trump’s pronouncements. Brazilian assets, in general, “plunged,” according to reports. Companies with significant exposure to the US market felt the immediate pinch. Brazilian aerospace giant Embraer reportedly sank 3.5%, while mining behemoth Vale SA (VALE) shed more than 1% of its value, closing at $10.22, reflecting a -0.58% move since the market opened. Even state-owned oil giant Petrobras and steel producer CSN saw their shares dip by over 1%. The Brazilian Real, not to be outdone, fell nearly 3% against the dollar, underscoring the immediate currency market volatility.
Brazil’s Vice President, in a remarkably understated response, simply suggested that Trump had been “misinformed” about their judicial processes, while President Luiz Inácio Lula da Silva warned of possible reciprocation, invoking Brazil’s economic reciprocity law. It’s almost as if sovereign nations prefer to handle their own legal affairs without external tariff-based persuasion. Who knew?
Copper’s Golden Moment (or Not)
Not content with merely shaking up South American trade, Trump also announced a 50% tariff on copper imports, also effective August 1, citing a “robust NATIONAL SECURITY ASSESSMENT.” Because, apparently, the second most used material by the Department of Defense (who knew?) needs a little tariff-induced patriotism.
The copper market, a notoriously sensitive beast, reacted with a mix of awe and bewilderment. COMEX copper futures had already surged a staggering 12.3% on July 8, hitting a record high of $12,330 per metric ton, in anticipation of the tariffs. On July 10, copper futures continued their ascent, climbing to around $5.60 per pound, marking a 1.64% increase from the previous day and hovering near all-time highs. This surge, however, wasn’t uniform globally, with prices reportedly falling on the Shanghai Futures Exchange and London Metal Exchange, suggesting a fascinating arbitrage opportunity for those brave enough to navigate the choppy waters of Trump’s trade policy.
Analysts were quick to weigh in, with Ole Hansen, head of commodity strategy at Saxo Bank, calling the 50% copper tariff “a massive tax on consumers of copper” that “risks making copper—and by extension, US manufacturing and infrastructure—materially more expensive.” Ed Mills, a Washington policy analyst at Raymond James, matter-of-factly noted that the copper tariff fits into the “national security” bucket of Trump’s tariff strategy. Indeed, nothing says “national security” quite like a sudden, dramatic increase in the cost of a fundamental industrial material. Goldman Sachs analysts, ever the pragmatists, suggested that this “higher initial rate of tariff could be used to negotiate,” with “concessions or exemptions” possibly to follow. Hope springs eternal, even in the face of a 50% import tax.
For US-based miners like Freeport-McMoRan (FCX), the news was, perhaps predictably, less grim. FCX saw its stock price increase by 2.53% in the past 24 hours, trading at $45.59. This is a stark contrast to the Brazilian mining giant Vale SA, which, as noted, experienced a decline. The market, it seems, can be quite discerning when it comes to whose copper is being taxed.
The Broader Brush: More Tariffs, More Fun
Brazil and copper weren’t the only recipients of Trump’s latest trade missives. Letters threatening tariffs as high as 30% to 40% were dispatched to at least 14 other countries, including Japan (25%), South Korea (25%), Malaysia (25%), and Thailand (36%). And just to keep everyone on their toes, Trump also threatened a “very, very high rate, like 200 percent” tariff on pharmaceutical drugs. Because nothing says “affordable healthcare” like a 200% import tax on life-saving medications.
Despite these broadsides, the overall US stock market on Wednesday, July 9, seemed to take it all in stride. The S&P 500 (SPX) rose 0.6%, the Dow Jones Industrial Average (DJI) added 0.5% (179 points), and the Nasdaq Composite (IXIC) climbed 0.9% (192.87 points), even reaching an all-time high. This apparent resilience was attributed by some to “bullish AI sentiment” – because when in doubt, blame (or credit) Nvidia hitting a $4 trillion valuation. Others suggested investors were simply “moving past the latest developments surrounding Trump’s tariffs,” or “shrugging off” them, perhaps because they’ve seen this movie before.
Indeed, on Tuesday, July 8, the markets had a “choppy day” with initial dips, but then recovered, with analysts like Ross Mayfield of Baird suggesting that Wall Street “doesn’t quite believe the worst of this is going to come to bear and is just kind of waiting for any sort of clarity.” It’s a testament to the market’s enduring optimism, or perhaps its collective amnesia, that it can absorb such shocks with a mere shrug and a slight upward tick.
Analyst Corner: The “TACO” Theory and Beyond
The financial punditry, of course, had its own colorful interpretations of the unfolding drama. The “TACO” trade, short for “Trump Always Comes Out,” made a reappearance, suggesting a certain fatalistic acceptance of the former President’s market-moving pronouncements. Ray Attrill, head of FX strategy at National Australia Bank, offered a particularly pointed assessment, stating that these latest tariffs “look like further inflationary acts of self-harm to the US economy,” contributing to a “sell American theme” in currency markets. Carol Kong, a currency strategist at Commonwealth Bank of Australia, echoed this, noting that the dollar’s selloff in response to the copper tariff suggests the “sell America narrative is still intact, at least in the currency markets.”
JPMorgan economists, while surprised by the Brazil tariff, cautiously noted that “it is possible these tariffs will never be implemented,” a sentiment that likely underpins much of the market’s ability to “shrug off” the threats. After all, many of these announcements “start with impressive numbers but are not final and are subject to change.” The Federal Reserve’s recent meeting minutes also acknowledged the “considerable uncertainty” regarding the “timing, size and duration” of tariff effects, while noting the risk of “more persistent effects on inflation.”
The Art of the Deal (and the Flip-Flop)
This isn’t Trump’s first rodeo, and the market has a long memory, albeit a selective one. Back in April, Trump rolled out a sweeping 10% tariff on most imports, grandly branding it “Liberation Day.” However, following significant “market jitters” and a “four-day rout in global financial markets,” he abruptly “blinked,” suspending most of these levies for 90 days to allow for negotiations. The deadline for these negotiations, initially Wednesday, July 9, was conveniently extended to August 1, just as the latest round of tariff threats began.
This pattern of dramatic announcement, market turbulence, and subsequent “negotiation” or delay has become a hallmark of the Trump era. It’s a policy flip-flop that, while frustrating for those seeking stability, provides a unique kind of entertainment for market watchers. It also means that companies like Boeing (BA), which saw a slight decrease of -0.05% to $226.69 in the past 24 hours, or Airbus (AIR), which conversely increased by 0.93% to 182.36 EUR, navigate a landscape where policy can shift on a tweet. Even Trump’s own social media venture, Truth Social (DJT), which trades on NASDAQ, has seen its share of volatility, with its price ranging from $11.75 to $54.68 over the past year, currently hovering around $18.82. The platform itself, where many of these tariff pronouncements originate, is a testament to the direct and often unfiltered nature of this administration’s communication.
In conclusion, the latest round of tariff threats from Donald Trump serves as a potent reminder that his influence on global markets remains undiminished. While some sectors, like Brazilian equities, feel an immediate and sharp sting, the broader US market often exhibits a curious resilience, perhaps accustomed to the “predictably unpredictable” nature of his policy pronouncements. As analysts continue to dissect the potential for “inflationary acts of self-harm” versus the possibility of future “negotiations,” investors are left to ponder the enduring spectacle of the market’s favorite reality show, where the next episode is always just a tweet away. And for those keeping score, it’s clear that personal relationships and political grievances continue to influence trade policy in ways that defy conventional economic models.
DISCLAIMER: We read Trump’s posts so you don’t have to. This is comedy meets market data, not financial advice. Not political advice either – we just like charts and chaos.
Elana Harper is a seasoned financial editor and market analyst with over a decade of experience covering global equities, economic trends, and corporate earnings. Known for her sharp insights, Elana specializes in making complex financial topics accessible to a broad audience. She now serves as the Senior Financial Editor at Stock Market Watch, where she oversees daily market coverage and political commentary.