12.08.25 - Another tariff pause

US President Donald Trump has extended the pause on China tariffs for another 90 days, pushing the deadline to November 9, 2025. This delay prevents a sharp increase in tariffs, which were set at 145% on imported goods from China.

Markets: Only a short-lived reaction

• China: the positive reaction was only short-lived — stock indices ended the day in plus

• US stock Futures trading almost unchanged

My View: Markets have grown indifferent to tariff-related announcements since the topic first shook markets in April. The reactions, both upward and downward, have become significantly more muted over time.

While the tariff pause provides short-term stability, I believe the market is still clinging to the TACO, betting that tariffs will eventually be removed with trade deals. However, investors continue to overlook the broader impact of tariffs on the economy, corporate earnings, and consumer behavior.

Looking at the "big beautiful bill," it’s clear that tariffs serve as a critical income source for the US. This makes it very likely that tariffs are here to stay. Investors still bet and hope for an eventual resolution.

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