From trade war to war war
Plus, voting records on the new RBA Monetary Policy Board
With President Trump's reciprocal tariff pause set to expire on 9 July, trade deals between the United States and the rest of the world remain few and far between. Japanese Prime Minister Ishiba walked away from the G7 summit empty-handed, with Japan insisting on removing both reciprocal and auto tariffs as a starting point for any negotiation.
The latest BoA global fund manager survey sees the 'final' US average tariff rate at 13%, which is bad enough, but also not 25%, with markets still very focused on the ‘not 25%’ part. This consensus is mistaken not so much in terms of the effective rate but in the view that there will ever be a 'final' rate while Trump is President. It's the political and legal uncertainty, not the number, that matters and that's not going away any time soon.
