Global equities advanced on Tuesday after U.S. President Donald Trump extended the deadline for his planned “Liberation Day” tariffs by three weeks, offering a temporary reprieve for several major trading partners as negotiations continue.
With the original tariff deadline just days away, Trump announced a new cutoff date of August 1, giving nations additional time to strike trade deals with Washington or face steep duties on exports to the United States.
In letters sent to over a dozen countries, including Japan and South Korea, Trump warned that failure to reach agreements would trigger tariffs as high as 25% to 40% on selected goods. Japan and South Korea, among the top U.S. trade partners, were told they could face 25% levies, while countries such as Indonesia, Thailand, South Africa, and Malaysia could see duties up to 40%.
Markets reacted cautiously, with analysts suggesting the move was a strategic play in ongoing trade negotiations. “I would say firm, but not 100 percent firm,” Trump said when asked if the new deadline was final. On whether the letters represented his final offer, he added: “If they call with a different offer, and I like it, then we’ll do it.”
Asian markets responded positively, with gains recorded in Tokyo, Seoul, Hong Kong, Shanghai, Mumbai, and Singapore. London and Frankfurt also opened higher, though Paris remained flat. Meanwhile, Wall Street indices slipped slightly, with the S&P 500 and Nasdaq pulling back from recent record highs.
Despite assurances from the White House that multiple deals are imminent, only two agreements — with Vietnam and the United Kingdom — have been finalized. China has reportedly reached a framework deal involving mutual tariff reductions.
Wendy Cutler, vice president at the Asia Society Policy Institute, said the tariffs on Japan and South Korea “send a chilling message” to U.S. allies. “Both countries have invested heavily in U.S. manufacturing and have been strategic partners on economic security,” she noted.
Japan’s Prime Minister Shigeru Ishiba has indicated that his country “won’t easily compromise” in trade talks.
Analysts warn of ongoing market volatility as uncertainty around tariff implementation persists. “Without more clarity, investors will struggle to price in potential scenarios,” said Tapas Strickland of National Australia Bank, cautioning that final tariff rates could exceed current expectations.
