Trade Tensions and Market Dynamics: A Global Overview

The latest leaked draft letter from the Office of the United States Trade Representative reveals that the Trump administration is exerting time pressure on trading partners, requiring countries to submit their best tariff proposals by Wednesday. This document demands that negotiating countries provide specific concession plans in key areas, including reducing tariffs on U.S. goods and agricultural products, eliminating non-tariff barriers, and making commitments in emerging areas such as digital trade and economic security. It is reported that economies negotiating with the U.S., such as the European Union, Japan, Vietnam, and India, will all receive this ultimatum-style document.

Meanwhile, subtle shifts are occurring in interactions between Washington and Beijing. White House Press Secretary Levitt confirmed that President Trump and President Xi Jinping are “likely” to have a phone call this week, without disclosing the specific time. This news aligns with previous statements by U.S. Treasury Secretary Benson, who expressed confidence in the role of “dialogue between the leaders of both sides in resolving trade disputes.” It’s noteworthy that Trump’s fiery comments on social media last Friday, accusing China of “flagrantly violating” tariff agreements and labeling himself as “not a nice gentleman,” add an unpredictable element to the upcoming summit talks.

There has been a legal twist as the Federal Circuit Court of Appeals has granted a temporary stay on the International Trade Court’s injunction against “Liberation Day” tariffs. This ruling allows the Trump administration to maintain its tariff pressure tactics but also requires substantial progress to be made within the 90-day truce period (stemming from the May 12th U.S.-China Joint Declaration). Market analysts point out that the current situation reflects the U.S. employing a “dual-track strategy”: maintaining tariff threats through judicial means on one hand and seeking breakthroughs through presidential diplomacy on the other.

At this critical juncture, trade delegations from various countries are intensively evaluating U.S. demands. The proposal content is expected to influence the final tariff rates set by the U.S., potentially covering a wide range of areas from agricultural products to high-tech goods. For multinational corporations, the developments in the next 72 hours are crucial as they will determine the level of tariff risks faced by global supply chains. Of particular interest are the tariff arrangements for digital trade rules and strategic goods like semiconductors, which could become significant variables in reshaping the international economic order.

Tariff news has dominated global stock markets and asset trends since 2025, leading to extreme market volatility in April this year. Nonetheless, the markets have rebounded, with U.S. and Hong Kong stocks returning to highs, and some stocks even surpassing previous peaks. However, caution signals are sounding once again.

Deadlock in China-EU Negotiations

News emerged last Friday (30th) that trade talks between the U.S. and China had hit a snag, suggesting that an agreement may require direct involvement from U.S. President Trump and Chinese President Xi Jinping. Due to Trump’s decision to significantly increase tariffs on the European Union, the days have been postponed from June to July 9th, causing a brief rally in U.S. stocks.

As the saying goes, “time flies when you’re having fun.” The global stock markets have seen an upsurge, largely due to Trump’s announcement on April 9th to suspend most tariff increases for 90 days. However, more than half of this time has passed, and except for the UK, most countries are still in negotiations. Trump has been using a wolf-like approach, first being tough and then easing up. As the deadline for negotiations approaches, it is believed that Trump will become more impatient, and the calm days may turn turbulent once again.

This week, the U.S. International Trade Court ruled that President Trump’s measures to impose comprehensive tariffs on countries with trade surpluses constitute an abuse of power. However, the White House swiftly appealed, and the Federal Appeals Court promptly suspended the International Trade Court’s decision, allowing Trump to continue implementing tariffs. Reports indicate that the Trump administration is considering a Plan B tariff, which, under current law, allows for tariffs to be imposed on most of the global economy, including a clause that permits tariffs of up to 15% within 150 days. In other words, Trump has been reminded to prepare his arsenal, making it difficult for opponents to hinder tariff imposition through legal means.

After significant price rebounds in various assets, it might be wise to take advantage of the opportunity to reduce positions and control risks, a strategy that allows for both offensive and defensive moves. Gold prices have retreated from $3,500 per ounce, with the market generally expecting fluctuations between $3,000 and $4,000 over the next two years. If risks escalate further, allocating funds to gold or silver, or even inverse ETFs, could be considered.