The Fear & Greed Index hit 78, landing in the “Extreme Greed” zone for the first time in 2025. This is a sign of what’s going on in the markets: euphoria has replaced caution, and positive momentum has taken over. But the July 9 deadline is coming, which could trigger the implementation of the increased tariffs announced by Donald Trump. What happens after?
eToro analyst for Romania, Bogdan Maioreanu writes that In less than three months, the S&P 500 index has seen a complete reversal in sentiment. The turning point was reached on April 9. Since then, we have seen a broad but uneven rally, with technology once again the main driver. But July 9 is coming, the date on which the 90-day pause on many country-specific tariffs will expire. It is expected that the United States will begin notifying its trading partners of tariff increases, with most of the new tariffs set to take effect on August 1. These tariffs could range from 10% to 70% for certain imports, depending on the country and product category. Countries that have not concluded new trade agreements with the US are likely to face significant tariff increases.
So far, only a few agreements, such as those with the United Kingdom and Vietnam, have been finalized. The new tariffs are likely to disrupt global supply chains, particularly in Asia, where countries such as Japan, South Korea, and Singapore could face significant new costs. Trump already posted on social media stating that he intends to impose 25% tariffs on Japan and South Korea. Companies may need to adjust their sourcing and production strategies, which could require considerable time and resources.
However, recent US trade agreements do not necessarily lead to lower customs tariffs. Instead, the Trump administration is imposing a universal minimum tariff of 10%, with country-specific rates that are often significantly higher. Asian countries are particularly targeted due to their proximity to China and the administration’s focus on reducing transshipment, the practice of transporting Chinese goods through third countries to avoid direct tariffs. This approach aims to enforce stricter rules of origin and eliminate long-standing trade loopholes.
The new trade agreement between the US and Vietnam exemplifies this policy in action. It serves as a test for the application of “rules of origin,” designed to prevent tariff evasion through transshipment.
According to the findings of a study by the consulting firm McKinsey, amid trade tensions between the US and China, companies may reorganize their sourcing to alternative suppliers. But if they are unable to do so, companies may reduce purchases, replace imported products with similar ones, or ramp up domestic production. These alternatives require a combination of resources, know-how, and time.
And the three weeks until August 1 may not be enough. Economists warn that higher tariffs are likely to be passed on to US consumers, which could fuel inflation and put pressure on household budgets. But there will also be effects on companies.
Japanese and Korean carmakers could be hit by tariffs of up to 35%, forcing them to rethink their US operations or raise prices. US exports could face new barriers, particularly to the EU, which is currently negotiating the tariffs rates, offering a 10% universal tariff as opposed to the 17% tariff for agriculture and food exports proposed by the Trump administration. Supply chains for electronics, machinery, and consumer goods will be disrupted, with some companies already announcing plans to relocate production to the US. But this is a long process that will not be able to prevent a negative, short-term impact on the business.
Romania might be affected too, as part of the EU. In 2024, Romanian goods exports to the United States were valued at USD 2.2 billion, representing 2.5% of the country’s total exports, according to Amcham. This positioned the U.S. as the 12th largest destination for Romanian exports. Nearly half of the export value came from industrial products, including machinery and transport equipment. Other significant categories include clothing, furniture, and instruments.
In the absence of an agreement, the EU and other major partners are likely to respond with their own tariffs, escalating trade tensions and potentially leading to protracted disputes. As a result, global trade growth could slow down. The World Trade Organization (WTO) predicted in its April report a contraction of -0.2% in merchandise trade in 2025 – down from +2.9% in 2024 – followed by growth of 2.5% in 2026, reflecting weaker global demand. At the same time, growth in trade in commercial services is expected to slow to 4.0% this year, from 6.8% last year, before rising slightly to 4.1% next year.
The situation is fluid. However, as we have seen before, the Trump administration could extend deadlines or negotiate exemptions for certain partners, but the current unpredictability is likely to affect investment, business plans, and financial markets.
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