Since a little after Donald Trump’s declaration of ‘Liberation Day’ and renewed tariff threats, global markets have shown a remarkable degree of indifference.
While equities dipped briefly in April, investors appear increasingly unshaken by the looming 1st August deadline.
Several factors underpin this resilience. First, market participants have grown accustomed to political brinkmanship.
Traders now view tariff announcements as bargaining tools rather than certainties, adopting a wait-and-see approach before pricing in long-term consequences.
The episodic nature of past trade spats has dulled their impact, especially without immediate legislative backing and with Trump often pulling back last minute or extending deadlines.
The media have labelled this … TACO!
TACO – Trump Always Chickens Out: Definition – A satirical acronym coined by financial commentators to describe Donald Trump’s predictable pattern of announcing aggressive tariffs, then softening or delaying them under market pressure.
Second, economic fundamentals remain firm. Corporate earnings continue to surpass expectations, and key indicators—such as job growth and consumer spending—suggest sustained momentum in major economies.
As a result, the tariff narrative has taken a back seat to earnings reports and central bank manoeuvres.
Third, diversification strategies have matured since the 2018–2020 trade wars. Many multinationals have already restructured supply chains, buffered risk through regional trade agreements, and hedged exposure to volatile sectors.
This strategic evolution makes markets less sensitive to unilateral tariff threats, especially if they lack multilateral support.
Analysts note that Trump’s rhetoric still carries weight politically, but the financial world operates on evidence, not headlines. As one strategist quipped, ‘Markets don’t trade on bluster; they trade on impact’.
That’s all very well – but markets can be fickle and reflect sentiment too.
With investors focused on earnings and monetary policy, tariff drama may remain background noise—unless policy becomes policy.
Until then, the markets seem content to roll with it!