This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
The Trump administration is straining what the term “reciprocity” means. The White House declined to reciprocate when Vietnam and the European Union offered to lower tariffs on U.S. imports. In addition, it uses an odd formula to decide how much it should impose in “reciprocal” tariffs on other nations.
In an interview, White House trade advisor Peter Navarro stated that Vietnam’s “nontariff cheating that matters,” noting instances such as intellectual property theft and the country’s frequent shipment of Chinese goods.
This implies that the Trump administration views tariffs as a tool to radically alter international commerce and manufacturing, in addition to addressing the U.S. trade imbalance, which is already not a reliable indication of economic health.
Business executives, many of whom are in charge of organizations that depend on and have benefited from the present economic paradigm, are beginning to express their worries and even their annoyance with Trump’s tariffs. Some are Republican Party funders and supporters. However, it appears doubtful that the Trump administration will return their kindness with its own due to its peculiar interpretation of “reciprocity.”
What To Note Today
Asian shares bounce as the Nasdaq rises.
On Monday, U.S. stocks largely declined. During the trading day, the S&P 500 fell 20% from its recent peak and lost 0.23%, momentarily entering bear market territory. The Dow Jones Industrial Average experienced its biggest intraday point movement ever, dropping 0.91% and swinging 2,595 points from low to high. Apple was beaten one more, but the Nasdaq Composite gained 0.1% as investors purchased other megacap tech equities. Tuesday saw a rise in Asia-Pacific markets, which had suffered significant losses the day before. Hong Kong’s Hang Seng Index increased by 0.3%, while Japan’s Nikkei 225 surged by about 6%.
China says it will “fight to the end.”
After Beijing responded with its own 34% tariffs on all U.S. exports, U.S. President Donald Trump warned Monday to impose an extra 50% tariff on China, raising the total penalties on Chinese imports to 104%. According to a statement translated by TNC, China’s Commerce Ministry declared Tuesday that it “resolutely opposes” Trump’s extra tariffs and promised to “fight to the end.”
Trump denies 0% tariff agreements
However, the Trump administration might not have changed its stance even if China had made concessions to the US. Vietnam’s commitment to remove tariffs on American imports “means nothing to us because it’s the nontariff cheating that matters,” stated White House trade advisor Peter Navarro on Monday. Additionally, Trump turned down the European Union’s proposal for “zero-for-zero” industrial products tariffs with the United States.
Growing worries and discontent
The possible repercussions of Trump’s tariffs are alarming business leaders. “Most CEOs I talk to would say we are probably in a recession right now,” stated Larry Fink, the CEO of BlackRock, on Monday. In his annual shareholder letter on Monday, Jamie Dimon, the CEO of JPMorgan Chase, stated that tariffs are likely to have “inflationary outcomes” and “will slow down growth” of an economy that is “already weakening.” Additionally, Republican Party megadonor and Home Depot co-founder Ken Langone referred to the 46% import taxes on Vietnam as “bulls—.”
In anticipation of a “sustained bottom”
Jeffrey Gundlach, the CEO of DoubleLine Capital, stated on CNBC’s “Closing Bell” Monday that he would retain cash until the S&P 500 reaches a “sustained bottom” because he is worried about the lack of market rebound. Gundlach believes the S&P 500 may reach this point before beginning to rise once more.
Also…
European and Asian Defense Stocks Surge Amid Shifting Global Alliances
Defense companies across Europe and Asia are seeing impressive stock market gains this year, despite broader market volatility triggered by U.S. trade tensions. While U.S. equities have taken a hit following President Donald Trump’s push for “reciprocal tariffs,” international defense firms have bucked the trend, some recording year-to-date gains of over 100%.
What’s driving the rally? A growing sense of strategic independence. Analysts suggest that many nations are rethinking their reliance on the United States as a dependable defense partner. With Washington’s recent moves straining long-standing alliances, countries are now taking a more self-reliant approach to national security.
This pivot is translating into higher defense spending across several key regions. In Germany, lawmakers approved a landmark budget reform that frees up massive funds for military modernization. Similarly, in the U.K., Prime Minister Keir Starmer has promised increased investment in national defense, signaling a broader shift in European security priorities.
According to David Roche, a strategist at Quantum Strategy, this renewed focus on local defense capabilities directly responds to growing geopolitical uncertainty and doubts about the stability of traditional partnerships, particularly with the U.S. at the center of global trade and diplomatic friction.
As governments ramp up their military budgets, investors are betting on long-term growth in the defense sector outside of the U.S., turning European and Asian defense stocks into standout performers in an otherwise shaky global market.
