Trump's new tariffs on copper and pharmaceuticals raise concerns

US President Donald Trump announced the introduction of new import duties: on copper-50%, and on pharmaceutical products - up to 200%. Despite the scale of the measures, US stock markets reacted cautiously: the S&P 500 and Nasdaq indices ended the session at zero, the Dow Jones lost 0.37%.

Against the background of global concerns about inflation, such a sluggish response from investors may indicate either an underestimation of risks, or an interpretation of Trump's initiatives as a political signal without operational consequences for the economy. However, economists warn that a sharp increase in tariffs on strategically important goods may lead to higher prices for products and increase inflationary pressures in the short term.

The administration's official position also shows confidence in the limited effect of tariffs on inflation. Stephen Miran, head of the President's Council of Economic Advisers, said that the likelihood of a significant price increase from the new tariffs is "as small as a pandemic or a meteorite fall."

"I don't want to be dismissive," he said. — "But predicting the future is always associated with uncertainty, and we must consider everything in a probabilistic framework."

According to statistics, the probability of an asteroid colliding with Earth in 2023 was estimated at 0.004%. The irony of such comparisons did not go unnoticed by the markets, but it also did not cause alarm.

Copper and pharmaceutical tariffs:
New duties are introduced without specific deadlines. The application of the tariff for pharmaceutical products may be postponed for up to one and a half years. Copper as a strategic metal is widely used in construction, electronics and energy, and pharmaceutical products directly affect the cost of medical care.

Chinese price dynamics:
The producer price index of China in June decreased by 3.6% compared to the same period last year. This is the deepest drop in two years, indicating continued deflationary pressures. At the same time, consumer prices rose 0.1%, signaling a possible trend reversal.

Risks for East Asia:
The economies of South Korea and Japan contracted in the first quarter. Against the backdrop of new US trade restrictions, experts expect a further slowdown, especially in export-oriented sectors.

Market behavior:
Leading US stock indexes ended the day without significant changes. Asian markets showed mixed dynamics.

Advantage of private investors:
According to industry sources, retail traders performed better than institutional investors, many of whom tried to review their portfolios in search of protection from the possible consequences of tariff news.

Inflation expectations remain in focus, and analysts will closely monitor the dynamics of prices and consumer demand amid increased protectionist rhetoric.