Trump’s tariff turmoil isn’t just delayed – it’s never coming
Trump’s tariff turmoil isn’t just delayed – it’s never coming
Ken FisherSat, June 6, 2026 at 9:00 AM UTC
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Donald Trump often uses tariff threats to negotiate new deals and it's safe to expect more agreements - Andrew Harnik/Getty Images
Another US court struck down another slate of terrible tariffs recently, yet investors can't help but fear that Donald Trump has more loony levies ahead.
How am I adjusting my outlook? It's simple: I'm not.
Thanks to my "four Es" – expectations, exemptions, evasion and enforceability – I know that wherever the US president's tariffs head next, they will be more economic bark than bite.
Tariffs are always bad, especially for the imposing country, as I explained last year. US stocks considerably underperformed global stocks in 2025 and tariffs played a large part in that.
So it follows that the 10pc global levies Trump imposed this February aren't good, nor is his threat to tear up the US-UK trade deal, nor his scheming for ways to replace February's duties, which legally expire on July 24.
But for stock prices, it is always surprises that matter most.
Tariff turmoil is now old news, baked into expectations and therefore stock prices. That is a far cry from last year, when the breadth, magnitude and oddness of the "liberation day" duties announced in April proved a huge negative surprise.
The FTSE All Share fell by 10pc in just three trading days as stocks pre-priced worst-case retaliation and trade devastation scenarios. It all was overdone, for the many reasons I detailed then.
If proof was needed, global trade grew 3.4pc in 2025.
Even Chinese exports, the most obvious candidate in Trump's crosshairs, rose 5.5pc overall despite US-bound shipments plunging.
Yes, UK goods exports fell by 1.8pc but that was markedly less than 2024's drop of 6.2pc or 2023's 7.2pc decline. An increase in shipments to Singapore, Germany, Poland and Norway helped to offset US declines.
Besides, the gangbusters tariff-free growth of services exports lifted total UK exports 3.6pc higher last year. Stocks rebounded strongly and the FTSE All Share had reversed all of April's declines by May 2, only to climb ever higher from there.
But how? Let's now consider exemptions, the second "E". For all Trump's talk, over half of all US imports were duty-free before the Supreme Court ruling in February this year.
Smartphones and semiconductor chips? Exempt. UK pharmaceuticals? Exempt, even before December's trade agreement. Aircraft engines and other parts? Exempted since last June.
Trump's fresh 10pc global levy introduced after the Supreme Court struck down his first attempt actually increased exemptions.
For items that did eventually face tariffs, our third "E" comes into play – and evasion was easy.
Consider: China's exports to south-east Asian economies boomed while in parallel, America's 2025 imports from ASEAN nations leapt 29pc.
This is the result of transshipping, in which an export is sent to an intermediate location – say, a country with low tariffs levied against it – before eventually reaching its destination.
Abundant shadier, even illegal, shirking techniques exist, too.
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The fourth difficulty lies in enforcement and here the obstacles are overwhelming.
When "liberation day" hit, America's Customs and Border Protection (CBP) agency had only about 2,500 employees to monitor hundreds of entry locations. Hiring and training processes are hugely arduous, limiting its ability to expand to meet the new workload.
Unsurprisingly then, in fiscal 2025, CBP performed an amazingly minuscule 465 inbound audits across more than 50 million shipments! You can't make this stuff up.
Wherever the US president's tariffs head next, they will be more economic bark than bite - Carlos Barria/Reuters
The globalised world can't unwind fast. Few products come wholly from one nation.
If a good is designed in the US, built in the UK with German machinery and its parts are sourced from 20 different countries, what is the nation of origin? What tariff rate applies?
Yes, firms front-running tariffs boosted early 2025 trade. They foresaw levies and stockpiled, hence US goods imports boomed 52pc annualised in the first quarter as inventories surged.
The next three quarters? They tanked by 35pc, 7pc and 2pc annualised, respectively. Imports from the UK followed that trend. It rippled across global GDP.
Dwindling stockpiles now mean US imports are surging as firms employ more workarounds and pent-up demand is unleashed.
All this makes the reality of tariffs far less injurious than feared.
Consider: in April 2025, the World Bank estimated US tariff rates averaged 28pc. Its January update cut that figure to 17pc.
But what were the actual 2025 US tariff rates? Slightly less than 10pc. February's Supreme Court ruling lowered that to about 7pc. Not good but far better than feared.
Dealmaking also helps mitigate tariffs' global economic effects and luckily, Trump loves haggling.
He often uses tariff threats to negotiate new deals, like those America struck with the UK, Taiwan, China, Japan, India (not yet inked) and more. His tariffs indirectly created new partners elsewhere, like the UK-India deal. The EU cut deals with Britain, India, Latin American nations and more.
Expect more agreements.
The widely feared tariff turmoil that many investors expected wasn't just delayed. It isn't coming.
Stocks reflected that quickly last year, when few fathomed it. Trump's threats have had even less effect since then. See Greenland, or his China threats, or all of February's bluster.
Stocks keep hitting new highs through it all (March's brief, war-driven drop notwithstanding). Markets know tariff fear exceeds the actual impact so for stocks, the power of tariffs ended by mid-2025, chalked up as old news.
The US Court of International Trade rebuke of Trump's section 122 global 10pc tariffs, issued on May 7, is toothless. He will run appeals past their July 24 legal expiration date. Little changes.
Tariff talk will irregularly resurge, yapping away. You can tune it out.
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Source: “AOL Money”
