Final Thoughts

Well, now we are a little more than a week away from a 50% “reciprocal” tariff on Brazil – one that could apply equally to Brazilian beef and Brazilian pig iron. How will it all add up? To get a flavor of the day, the word “stackable” has come to be associated more with tariffs than hamburger patties or pancakes.

On Steel Dynamics Inc.’s (SDI’s) earnings call on Tuesday, Chairman and CEO Mark Millett said he thought tariffs would be a “mainstay” of trade agreements going forward. Seems like that is definitely the way to bet, at least with the current presidential administration.

While the UK deal might not have ushered in a wave of deals, “Liberation Day” did trigger multiple rounds of negotiations with Canada, Mexico, the EU, Japan, and others. Also, Trump threatening higher reciprocal tariffs on Truth Social from time to time might’ve brought some countries to the table.

A deal with Japan has just been announced, one that includes steel-intensive goods like autos and auto parts. The overall deal is for 15% on imports. The tariff was negotiated down to 15% from the 25% that had been in effect on autos and auto parts. And yet, so far, Section 232 tariffs on steel and aluminum are not included in that deal and remain at 50%.

Deal signed. Everybody happy? Not by a long shot. Among the entries in the miffed camp, place US automakers and the United Auto Workers (UAW) union.

Domestic automakers are steamed because they face 50% Section 232 tariffs on steel and aluminum. They also face 25% S232 tariffs on imported auto parts and finished vehicles, according to the Associated Press. US automakers say the 15% tariff the Japanese have negotiated puts the US side at a disadvantage.

Meanwhile, the UAW said on Wednesday it was “deeply angered” by the deal struck by the Trump administration with the Japanese. After covering the UAW strike back in 2023, I know that when UAW President Shawn Fain gets angry, a lot of colorful language is likely to follow. And who knows what else…

“We know tariffs can work—but the execution here falls far short. Shifting timelines and moving goalposts have undermined business confidence and delayed investment,” the union said in a statement on Wednesday.

That sentiment could certainly apply more broadly. We have definitely seen it echoed in comments from SMU survey participants.

We know negotiations are ongoing with Canada and Mexico, and the EU could be next up to the plate.

Trump has threatened 30% tariffs on the EU, and media reports say a deal could be in reach – with a 15% rate a possibility. If that doesn’t work out, the European Union has planned some countermeasures, a report from the BBC said.

Attack, negotiations, counterattack, détente, new salvos, negotiated agreement. And then you wonder if that agreement will take hold. That seems to be how things progress these days on the trade front.

So, here’s hoping that as the trade situation develops, a little more order and regularity will be introduced – even if tariffs remain a mainstay. As our survey respondents keep pointing out, if there’s one thing a market never likes, it’s uncertainty.