Only the markets can stop Trump's tariff regime now

President Trump's gone maximalist again on tariffs, and just like the last time, it appears the only thing that could stop him is a market meltdown.Why it matters: Stocks seem very, very disinclined to stop the historic rally they've been on for the last three months.Catch up quick: Every few hours this week, Trump has thrown down another trade gauntlet.50% levies on Brazil, 35% levies on Canada, threatens to raise the baseline tariff rate against other countries — nothing is stopping Trump's base instinct to use tariffs as one of the most powerful levers of his presidency.The intrigue: His view on the reaction — and what really matters — is also now incredibly clear."I think the tariffs have been very well-received. The stock market hit a new high today," Trump told NBC News Thursday night.Zoom out: Stocks fell to the brink of a bear market in early April after Trump first imposed his sweeping global tariffs.When he paused them a week later, that triggered what has become one of the strongest short-term rallies in history, according to data from Ryan Detrick, chief market technician at the Carson Group.Between the lines: Plenty of strategists believe that rally has been fueled in part by the so-called TACO trade: the assumption that "Trump Always Chickens Out" and pulls back from the most grave tariff threats. But the more intense those threats get, the more at-risk the markets are if he doesn't pull back quickly.The record highs have, in effect, emboldened the president to double down (almost literally) on the trade war.What they're saying: "Something tells me that the President will not back down unless the market delivers him an April-proportioned message," writes Mark Malek, chief investment officer at Muriel Siebert & Co., in a note.Malek noted that the first 21 letters sent out by the administration indicate a weighted average tariff of 30%.That's about triple what the market is currently pricing in for levies.Friction point: That's the other problem, per no less than JPMorgan Chase CEO Jamie Dimon — how the market is pricing current conditions.Dimon said Thursday markets are "a little desensitized," adding that investors are underpricing the risk of Fed hikes off the back of tariff-driven inflation, immigration policy and the increased deficit.He warned of "complacency in the market" being a major threat. What to watch: The market is now back on the tariff clock, as it's been over and over again this year.The new trade deadline is August 1, and while there's still plenty of time, nerves will inevitably increase as the days grow shorter. "Eventually, asset markets catch up," said Bob Elliott, chief investment officer at Unlimited Funds.The bottom line: Sometimes the sequel doesn't hit like the original. These tariff threats are looking very similar to the April levies, but investors have seen this movie before and lost out on the post-volatility rebound. They won't be burned again — and that could be their downfall.

Comments

World news

An Arizona man is handing out bottled water to neighbors in extreme heat. His HOA is fining him $100 every time

Independent

Comments

World news

An Arizona man is handing out bottled water to neighbors in extreme heat. His HOA is fining him $100 every time

Elderly Palestinian man forced to live in scrapped minibus after Israel rips up major refugee camps

FEMA is not shutting down but ‘rebranding’ to highlight local leaders’ roles in disaster response

Trump threatens GOP senators: Vote to defund NPR and PBS, or I’ll withhold my endorsement

Budget Director confronted over Trump’s lavish spending amid government cuts

State Department puts 1,300 staffers on notice after Supreme Court clears Trump’s plan for mass firings

Moment woman attacks Tesla in school parking lot

Japan record rainfall submerges roads in water as drivers wade through severe flooding

Trump praises Noem’s disaster response – because he saw her on TV

McDonald’s manager and mom of six stabbed to death by co-worker over argument

Trump’s warning to Putin after Russia drones hit maternity ward: ‘You’ll be seeing things happen’

Celebrity deaths of 2025 as Mike Berry passes away aged 82

Passengers stranded in airport for 17 hours after couple smoke on London-bound flight

Lufthansa CEO’s wife ‘runs over and kills woman crossing the road’ on family holiday

Don’t be fooled – Nigel Farage doesn’t actually want to stop the boats

Air con for your home could become part of £7.5k heat-pump grant

I’m a doctor in Gaza – I’m treating a rising number of patients for bullet wounds

How many migrants are estimated to work illegally in UK – compared with Europe

Nobel Peace Prize laureate Narges Mohammadi says Iran threatens her life after its war with Israel

UN's food agency limits aid operations in West and Central Africa due to funding cuts

Kenya opposition leaders demand president's resignation over shooting comments

Kurdish fighters burn weapons in significant step towards peace with Turkey

Preliminary report into Air India crash submitted to authorities - but may not be made public

Mystery discovery in space is most likely the 'oldest comet ever seen'

Trump brutally ended Obama’s flagship project to power Africa – but the dream is not dead

Steve Bannon calls for special prosecutor to investigate ‘all’ Epstein documents

Iran confirms arrest of missing teenage French-German cyclist

White House mercilessly mocked for posting pic of Trump as Superman

Palestinian grandmother detained after Australia cancels visa on security grounds

Missing backpacker found alive after nearly two weeks lost in Australian Outback

Tennis player shot dead by own ‘insecure’ dad over ‘taunts he lived off her money’

Nearly 60,000 air fryers urgently recalled in Ireland due to fire risk

Boy dies on beach after being buried alive when hole he was digging collapsed

How Putin’s deadly new drone strategy is changing the war in Ukraine

Reeves has delayed cut to cash ISA limit – what experts say she should do instead

Atalanta demand £50m+ for Newcastle and Man Utd target

Where are there hosepipe bans? Full list of UK areas and rules explained

How cutting pensions could improve junior doctors’ pay – and whether it would work

Justin Bieber’s surprise album Swag rebuts internet speculation

How Heathrow passengers pay world’s highest airport taxes – and it could be more

Grok’s MechaHitler disaster is a preview of AI disasters to come

What two new market moves say about U.S. rare earth minerals

Greek parliament passes suspension of asylum claims despite international criticism

At least 23 dead after airstrike on Buddhist monastery in Myanmar

Lebanon's president reveals the country's stance on relations with Israel

US commander says China has failed to coerce rival states in South China Sea

Cambodian lawmakers pass constitutional amendment allowing government to revoke citizenship

Canadians are cool to Carney government forcing through 'national interest' projects unilaterally: poll

Ukrainian intelligence officer gunned down in Kyiv

Grand Canyon among US national parks evacuated due to wildfires

FBI offering $50,000 reward for info on protester who appeared to ‘fire a gun’ at ICE agents

Concentration, removal and occupation: Inside Netanyahu’s plan for the future of Gaza

Texas flood before-and-after pictures show devastating toll of catastrophe which left 121 dead and 173 missing

Inside the ICE offices where morale is ‘miserable’ and the deportation push has become ‘mission impossible’

Prices of these two drinks could surge if Trump’s Brazil tariffs stick

Watch: Luxury £80m British-made superyacht goes up in flames in St Tropez marina

Barabak: He tried to keep Trump from a second term. But six months in, 'I'm very impressed.'

Microwaves produce radiation. Is that bad for me?

Israel is taking its old Gaza model abroad

The internet hates Botox and filler — but only when it looks bad