The White House has signed many prominent trade deals in months since President Donald Trump slapped significantly higher tariffs on imports in early April. However, some on Wall Street warn that the turmoil surrounding the US and its major trading partners is not over. “Our views have been in conflict with investor consensus all year round. They are still,” Andy Laperriere, Piper Sandler’s US policy director, wrote in a report this summer. “The new story is that despite the high tariffs, there are transactions that provide stability in trade policy, so economic actors can adapt to the new reality and move on,” he said. However, in his company’s opinion, “trade stability is not included in the card.” Trump’s “mutual” tariffs came into effect on August 7th. The president announced a massive taxation on April 2, and their first size shook the stock before a string of walkbacks from the White House eased investor concerns. The stock then recovered these losses and achieved record highs. Recently, investors have been betting that Trump will not implement the toughest person in his trade plan. What has become known as the octopus trade is short for “Trump Always Drops Out Chickens.” But the obligations Trump announced in early April have largely been established. As shown in the Piper Sandler data, the exception is Vietnam. Though still high, the import rate from Vietnam is less than half the level Trump threatened on April 2, Lapeliere said. “One of the things I find interesting is that one of the things I think are underestimated is that ‘liberation day’ has almost arrived,” Laperriere said in a webinar earlier this month. “If we look at our major trading partners, most of what was posted on the board on April 2nd is now on the board.” The unstable Trump tariff catalyst faces serious legal challenges, and it appears that federal court of appeals judges are skeptical of the president’s claim that he has the power to impose new tariffs under the International Emergency Economic Force Act of 1977 (IEEPA). Trump later blocked his tariff policies and warned the US court. Continuing litigation and uncertainty surrounding the future of tariffs and trade persists. “If the court determines that he is beyond his authority to impose tariffs, that is very likely, so the transaction is invalid,” Laperriere wrote in his report. “The Supreme Court is likely to oppose Trump’s use of the IEEPA in the next 10 months.” Ed Mills, managing director and Washington policy analyst for Raymond James, said one reason the country continues to negotiate is the assumption that if his Ieepa’s claims are discontinued, Trump can pivot to use another authority. For example, Section 338 of the Tariff Act of 1930 (original Smoot-Hawley Protectionist Act) allows the president to implement tariffs of up to 50% on imports from countries that discriminate against US commerce. Trump “has a history of taking full legal process to run out of watches,” Mills told CNBC. “The tariffs will stay here.” Another factor in the instability is the lack of details regarding the trade agreements reached so far. For example, Trump has announced a trade deal between Indonesia and the Philippines, but details have not been confirmed yet. Additionally, officials from other countries, including Japan and South Korea, have opposed Trump on the terms of their agreement, indicating that they have not yet been finalized. Unstable “foreign officials explain some details in a different way than Trump and his top advisors, so even some of the high-level traits are not ironed,” writes Laperriere. “These transactions have not been resolved and are built on false promises. They could easily collapse.” In addition, he insisted that some trading partners, such as the European Union, would likely live by their transactions for a very long time. Last month, Trump said he reached a deal with the bloc, which includes a 15% tariff on most European goods coming to the US, but he criticized European leaders and analysts for calling it “imbalance.” Meanwhile, no final agreement has been reached between major partners such as the US and Canada, Mexico and China. In fact, Trump delayed the imposition of additional tariffs on Chinese goods for another 90 days last Monday. The president was able to meet with Chinese President Xi Jinping.” [Asia-Pacific Economic Cooperation] “But, “What happens at that meeting is a big wild card,” Summit “But there will be countries where we can reach the final agreement and there will be other countries that will fall apart,” Mills told CNBC. This summer, the US economy believes it can withstand the high tariff threats both domestically and internationally. In May, the market said it was “too expensive in early May.” “He can change his mind anytime,” said Brian Gardner, the lead policy strategist at Stifel.
