Published: · Severity: FLASH · Category: Breaking

New US tariffs hit 99% of imports, boost stagflation risk

Severity: FLASH
Detected: 2026-07-24T10:25:35.041Z

Summary

The Trump administration has imposed new 10–12.5% tariffs on imports from 60 trading partners covering 99.4% of US imports, citing forced‑labor concerns. This is a globally disruptive trade shock likely to lift inflation expectations, weigh on global growth, and drive volatility in industrial commodities and FX.

Details

  1. What happened: A new US measure imposes tariffs of 10% and 12.5% on imports from 60 trading partners, including the EU and China, reportedly covering 99.4% of total US imports. This is not a targeted sectoral move but a near‑universal tariff regime framed around forced‑labor enforcement. It dramatically escalates trade tensions and effectively rewrites the cost base of US import flows.

  2. Supply/demand impact: On the supply side, the tariffs raise the landed cost of virtually all imported goods into the US, including energy products, metals, machinery, autos, and consumer goods. Over the next 6–18 months, this is inflationary for the US and, to a lesser degree, for global supply chains, as firms pass through higher costs or reconfigure sourcing. On the demand side, higher prices and retaliatory measures are likely to depress real income and investment, lowering global growth and eventually dampening medium‑term demand for cyclicals (energy, base metals, some ags). Near term, front‑end demand for some commodities could rise as firms bring forward purchases ahead of full incidence and possible counter‑sanctions.

  3. Affected assets and direction: Macro and FX: Bullish USD on safe‑haven and repatriation flows, bearish CNY, EUR and export‑oriented EM FX (KRW, TWD, MXN). EM sovereign spreads likely wider. Equities: global cyclicals, autos, and semis at risk. Commodities: Base metals (copper, aluminum, nickel) may initially rally on cost‑push and stocking but face medium‑term downside as global manufacturing slows. Energy demand growth expectations could be revised down, modestly bearish for the back end of Brent/WTI curves while near‑term inflation hedge demand is mildly bullish. Agricultural commodities used in processed foods and feed (soy, corn) may see volatility from shifting trade routes and potential retaliation, especially by China.

  4. Historical precedent: The 2018–2019 US‑China tariff battles produced multi‑percentage‑point swings in industrial commodities and EM FX, with copper and soybeans particularly sensitive. The current measure is broader in scope and could have a larger macro impact if sustained.

  5. Duration of impact: Structural. Unless rapidly reversed, this represents a regime shift in US trade policy. Markets will re‑price global growth, inflation, and supply chains over quarters to years, not days, with recurring volatility around retaliation cycles and carve‑outs.

AFFECTED ASSETS: DXY, EUR/USD, USD/CNY, USD/KRW, Copper futures, Aluminum futures, Brent Crude, WTI Crude, Soybean futures, Corn futures, EM sovereign CDS

Sources

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