Tariff clock ticking: US trade policy shift looms

Markets are eyeing the July 9 expiration of the United States’ 90-day pause on new trade tariffs, a deadline that could redefine global trade tensions and market dynamics. Dubbed “Liberation Day,” this pause was introduced by President Donald Trump on April 9 to allow breathing room for high-stakes negotiations with major trading partners, excluding China. As the deadline approaches, investors are growing increasingly cautious about how trade policy might pivot, and the implications could be far-reaching across commodities, equities, and FX markets.

Key factors

1. Rising trade tensions spark recession fears 
   President Trump’s unpredictable tariff posture continues to unnerve global markets. Recent tit-for-tat moves include EU duties on American whiskey and Trump’s threat of 200% tariffs on European wines and spirits. The growing uncertainty has economists sounding alarms: J.P. Morgan had previously raised its US recession to 60%, citing “extreme U.S. policies,” according to Bloomberg but this has since been reduced to 40%. 

2. No breakthrough in trade talks 
   Despite the 90-day pause, negotiations with the EU, Mexico, and Japan have yielded few tangible results. A lack of diplomatic progress increases the risk of a hardline reset in US trade posture, particularly if the administration chooses to reassert leverage via tariffs. 

3. Strategic post-election policy reset 
   Now firmly in power post-2024, the Trump administration appears focused on reconfiguring US trade relationships to favour domestic producers. This could mean a structural turn toward economic nationalism, raising long-term implications for trade-sensitive industries like autos, semiconductors, and agriculture. 

4. Safe-haven demand amid policy uncertainty 
   As seen in prior episodes of trade stress, gold has seen investor interest rising to all-time highs in April and steadying around this level. While global equity indices may come under pressure they have recently also printed record highs. 

Technical insights

With the expiration of the tariff pause fast approaching, traders should keep a close eye on instruments that historically react to protectionist policies — including US and European equities, USD crosses, and industrial commodities. 

S&P 500 Index (US500) - Cash

The index has shown record new high, and buy momentum still there at the moment, but be cautious on 9^th July Trump tariffs deadline on global. 

• Resistance: 6,280-6,300 (next level)

• Support: 6,140 (previous record high), 6,000 (psychological level)  

• RSI: A bit overbought as above 70 - be cautious on any buy momentum change

EUR/USD - Cash

This pair could be highly sensitive to tariff moves involving the EU, particularly if Trump targets European autos or luxury goods.  

• Resistance: 1.1980 - 1.2000 (Key level)  

• Support: 1.1650 (10-day MA), 1.1550  

• Momentum: Cautious buy as RSI a bit overbought above 70  

 Tariff threats on EU exports could weaken the euro, while any risk-off sentiment may favour the USD.

USD/JPY - Cash

A popular risk barometer and key FX proxy during geopolitical or trade-related tensions. Looks short break on the recent downside trend. 

• Resistance: 144.80 (10-day MA), 146.20 (Key resistance level) 

• Support: 142.00 - 142.50 (recent low support)  

• RSI: pretty average on RSI level, indicating waits more market news to make recent trend much clear. 

• Note: Attention to Japan - US tariffs talk, may trigger JPY weaker.

Copper - Cash 

Highly sensitive to global trade talks and industrial activity with global economy resilience. 

• Resistance: $5.15 /lb (Last year high), $5.30 /lb (Mar recent high)

• Support: $4.90 - 4.93 /lb  (10-day MA range) 

• Trend: Consolidating strong momentum after a strong Q1–Q2 rally; could break lower if tariffs dampen demand outlook

Data as of July 03, 2025 UTC.
Past performance is not an indicator of future performance.

Outlook

With the July 9 deadline fast approaching, markets are at an inflection point. Possible scenarios include: 

1. Tariffs Reinstated: Risk-off sentiment may rise, pressuring equities and cyclical assets. 

2. Truce Extended: Could provide short-term relief, though uncertainty would linger. 

3. Surprise Deal: Unlikely, but would spur a broad-based rally, particularly in trade-dependent sectors. 

Risks include retaliatory tariffs from trading partners, further disruption to global supply chains, and central banks remaining sidelined in the face of geopolitical volatility.  

Conversely, any signs of breakthrough in talks could ease recession fears and renew appetite for risk assets. 

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