Trade Partners Race to Strike Deals Before August 1 | Balance of Power Late Edition 7/10/2025

Trade and Tariffs - The Trump administration is issuing tariff demand letters, totaling 22 letters so far, to ignite negotiations with some nations and political standoffs with others [1] - Brazil was hit with a 50% tariff, leading to political tensions as the Brazilian president views it as a political message [1][15] - The market is uncertain about tariffs, with only a handful of deals signed and details obscured; many countries are under pressure to deliver concessions to the U S by August 1 to avoid higher tariffs [1] - The U S has already collected billions of dollars in tariffs, estimated to reach around $300 billion by the end of the year, which is a little over 1% of the U S economy [41] - The market does not fully believe President Trump's statements about tariffs, and uncertainty around trade policy remains high [11][12] - The negative effects of tariffs may not be as bad as initially priced into the market, but the top-line benefits promised may not materialize [5][13] - The most important trade deal for the White House to present is with Europe, given its status as the largest investor in the U S and the complexity of needing approval from 20 different countries [21][22] Market and Economic Impact - Tech stocks, industrial stocks, and NASDAQ are at record highs, with NVIDIA up 40% since Trump tariffs [2] - The S&P 500 closed at a record high, while industrial stocks were less than 1% from achieving a record high [4] - Market gains are primarily driven by big tech companies like Microsoft, Amazon, and NVIDIA [6][7] - Smaller companies in the Russell 2000 and S&P 500 mid-caps are struggling and not near record highs, indicating a lack of broadening in the rally [8] - Imports to the U S represent roughly 13%-14% of GDP, with only a small portion covered by tariffs so far, making the impact visible but not necessarily prominent [15] - The uncertainty surrounding tariffs is making the Federal Reserve wary of cutting rates too quickly [17] Geopolitics and Policy - Secretary of State Marco Rubio met with his Russian counterpart to express disappointment with Vladimir Putin over attacks on Ukraine [1][23] - American-made weapons have resumed shipments to Ukraine, including artillery shells and mobile rocket artillery missiles [29] - The U S has not given Ukraine any U S F-16s but has okayed allies to do so [34] - The Justice Department has opened criminal investigations into former FBI Director James Comey and former CIA Director John Brennan [23] - A federal judge in New Hampshire blocked President Trump's effort to limit automatic birthright citizenship, reinstating protections that were paused last month [71] Agriculture - For American farmers, President Trump's tariff policy is a mixed bag [50] - Corn prices are under $4, and soybean prices are under $10, reflecting a market with a surplus and a lack of demand [51] - China did not meet the goals and requirements of the Phase One agreement during the first Trump administration [51] - The U S agriculture relies on several hundred thousand farmworkers, primarily in specialty crop and dairy areas [54] - Changes to the SNAP program could reduce farm income, as $020 of every food dollar spent at a grocery store ultimately ends up with a farmer [63]