Help me understand the next upcoming 90 days for the tarrif negotiation and market reaction


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The deep research logic is organized as follows:
Okay, let's tackle this question about the next 90 days of tariff negotiations and market reactions. The user is interested in the NASDAQ Composite, which is tech-heavy, so I need to focus on sectors like tech, semiconductors, and how tariffs might affect them.
First, I'll start by looking at the EU's suspension of retaliatory tariffs. They agreed to a 90-day pause to negotiate, which is a big move. The EU's statement mentions they want to give negotiations a chance but warn that if they're unsatisfactory, the countermeasures will kick in. That's important because it shows both sides are trying to avoid a full-blown trade war, which would hurt global markets.
Then, the US's 90-day pause on tariffs, excluding China, is a key point. The Treasury Secretary mentioned clarity on policies in the next 90 days, which is a positive sign for markets looking for stability. However, the 10% baseline tariff and higher sector-specific tariffs (like 125% on China) are still in place, creating uncertainty.
Looking at the market reactions, the NASDAQ had a sharp rebound after the initial tariff announcements, but tech stocks are sensitive to trade policies. Companies like ASML and Nvidia are mentioned in the references, facing potential impacts from tariffs. The user's interest in NASDAQ means I should highlight how tech sectors might be affected, especially if there's a shift in supply chains or increased costs.
Japan's trade negotiations are also a factor. They're aiming to finalize a deal within the 90-day window, which could set a precedent for other countries. The automotive and tech sectors in Japan are heavily affected, so any progress here might influence broader market sentiment.
The WTO's projection of a 0.2% to 1.5% decline in global trade is a red flag. If the 90-day pause ends without a resolution, the decline could be more severe. This uncertainty is likely to cause volatility, especially in sectors like automotive and semiconductors, which are mentioned in the references.
Treasury Secretary Bessent's roadmap for clarity on tariffs, taxes, and deregulation is crucial. The user's short to medium-term horizon means they'll be watching for any signs of progress or setbacks in these negotiations. If Bessent can deliver on his promise, it might stabilize markets; otherwise, continued volatility is expected.
China's refusal to engage in a "tariff numbers game" and their non-tariff measures (like restricting rare earth exports) add another layer of complexity. The tech sector, particularly semiconductors, relies heavily on these materials, so any disruption could impact companies in the NASDAQ.
Putting this all together, the next 90 days will be critical for determining whether the current trade tensions can be de-escalated. The markets are likely to react positively to any progress in negotiations but remain cautious due to the high stakes involved. For the NASDAQ, tech companies' exposure to global supply chains and trade policies will be key drivers of their performance.
Concluding Statement: The next 90 days will be pivotal in determining the trajectory of global trade tensions, with significant implications for markets, particularly the tech-heavy NASDAQ Composite. Below is a structured analysis of the tariff negotiation landscape, sector-specific risks/opportunities, and potential market reactions:
1. Tariff Negotiation Framework & Key Players
- EU-US Talks: The EU suspended retaliatory tariffs on $23 billion of U.S. goods for 90 days, conditional on "satisfactory" negotiations 12. The EU emphasizes a "zero-for-zero" tariff agreement and opposes U.S. sector-specific levies (e.g., 25% on steel/aluminum) 43.
- U.S.-Japan Talks: Japan faces a 10% baseline tariff + 25% on autos/steel/aluminum. The U.S. aims to finalize a deal within the 90-day window, with Japan prioritizing exemptions for critical industries 56.
- U.S.-China Standoff: China rejects the "tariff numbers game," maintaining non-tariff measures (e.g., rare earth export restrictions, Boeing jet halts) 89. The U.S. retains a 125% tariff on Chinese goods, with no pause 18.
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2. Market Sentiment & Sector-Specific Risks
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Tech/Semiconductors:
- Uncertainty: U.S. tariffs on Chinese imports (125%) and de minimis loophole closures (120% tax on small parcels) threaten global supply chains 1011.
- Opportunity: Companies like ASML (semiconductor equipment) and Nvidia (AI chips) may pass tariffs to customers, but risks of demand destruction persist 128.
- NASDAQ Impact: Tech stocks sensitive to trade policy (e.g., Apple, Intel) could face volatility, but progress in EU/Japan talks might stabilize sentiment 1314.
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Automotive:
- U.S. 25% tariffs on Japanese autos and EU steel/aluminum threaten margins for global manufacturers (e.g., Toyota, Ford) 57.
- A 90-day deal with Japan could reduce sector-specific tariffs, benefiting automakers 67.
-
Agriculture:
- EU retaliatory measures (e.g., 25% tariffs on U.S. agricultural goods) remain on hold, but failure to resolve steel/aluminum disputes could reignite tensions 215.
- Companies like Local Bounti and Arcadia Biosciences (agricultural products) have recently shown resilience, up 11.8% and 6.9%, respectively 16.
3. Treasury Secretary Bessent’s Policy Roadmap
- Clarity Timeline: Bessent promises "substantial clarity" on 14 major trading partners (excluding China) by July 9, focusing on non-tariff barriers (currency manipulation, subsidies) 1718.
- Risk: A 10% baseline tariff + sector-specific levies (e.g., 145% on China) create persistent uncertainty, with analysts projecting a 35%-45% U.S. recession risk 1419.
- NASDAQ Angle: Tech firms reliant on global supply chains (e.g., Apple, Micron) will monitor deregulation progress and tariff exemptions 2018.
4. Global Trade Outlook & Market Catalysts
- WTO Projections: Global trade volume could shrink by 0.2%–1.5% in 2025, depending on tariff resolution 1921. A U.S.-China decoupling (80% drop in bilateral trade) would exacerbate risks 21.
- NASDAQ Drivers:
- Positive: Progress in EU/Japan talks, smartphone/semiconductor tariff exemptions 1814.
- Negative: Persistent U.S.-China tensions, 10% baseline tariffs 819.
5. Investor Takeaways
- Short-Term (Next 30 Days): Focus on EU/Japan negotiation progress and U.S. tariff exemption updates (e.g., tech goods) 618.
- Medium-Term (Next 90 Days): Monitor WTO trade data and NASDAQ tech stocks sensitive to supply chain risks (e.g., ASML, Nvidia) 1316.
- Key Watchlist:
- Tech: ASML, Nvidia, Intel 128.
- Automotive: Toyota, Ford 57.
- Agriculture: Local Bounti, Arcadia Biosciences 16.
Final Note: The NASDAQ Composite’s resilience will hinge on whether the 90-day pause fosters concrete agreements (e.g., EU steel tariffs, Japan auto exemptions). Investors should balance optimism from recent market rebounds 22 with caution over lingering trade policy uncertainty.
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