President Donald Trump told TV networks he will mail tariff letters to Canada and the EU “today or tomorrow.” He floated a universal 15%–20% baseline duty on any country that doesn’t get a deal, up from the current 10%. Within hours, he posted a letter to Ottawa imposing a 35 % tariff on all Canadian goods starting 1 August, with a carve-out likely for USMCA-covered products.
An administration aide said USMCA items should be exempt, but even that clarification couldn’t stop a quick wobble: S&P 500 and EUROSTOXX 50 futures fell about 0.8 % before trimming losses to –0.3 %. Currency markets flickered too, with the US dollar up 0.3 % on the loonie and 0.2 % on the euro.
Trump also warned that any Canadian firm routing goods to dodge the 35 % rate will face higher penalties, and he repeated plans for a flat global tariff if talks stall.
Yen & Asia FX Slide
With hopes fading for a last-minute US-Japan trade deal, the yen weakened to ¥147.12 per dollar, on course for its worst week of 2025. Emerging-Asia currencies followed: the rupee, ringgit and won led regional declines after Trump signalled a 15–20 % blanket levy.
Kazakhstan Joins the Watch-List
Trump’s tariff net also snared Kazakhstan: a letter threatens 25 % duties from 1 August unless Astana reaches a deal. President Kassym-Jomart Tokayev responded that he is ready for “constructive dialogue,” noting that most Kazakh exports to the US — uranium, ferro-alloys, silver and oil — are already exempt.
Analysts warn that squeezing a critical-minerals supplier could push Central Asia closer to China and Russia, undermining Washington’s long-term strategy to diversify raw-materials supply.
UK GDP Surprise
Across the Atlantic, the UK economy shrank 0.1 % in May, wrong-footing economists who expected a 0.1 % rise. The Office for National Statistics blamed weaker manufacturing — especially oil & gas and autos — offsetting a small rebound in services. It is the second straight monthly contraction.
Corporate & Market Notes
- Fast Retailing (Uniqlo) warned US tariffs will “significantly impact” its business and said it will raise prices later this year; shares slid almost 7 % in Tokyo.
- BMW reported Q2 sales up 0.4 %, but German automakers continue to lobby Washington for relief from the existing 25 % auto tariff.
- Commodity desks are on alert ahead of the previously announced 50 % copper tariff and the White House’s musings about 200 % pharmaceutical duties.
Global Snapshot
| Asset | Level / Move |
|---|---|
| S&P 500 futs | -0.3 % |
| EUROSTOXX 50 futs | -0.3 % |
| Nvidia (NVDA) | $164.10 → $4.004 tn m-cap |
| BTC-USD | $113 200 (record intraday) |
| USD/JPY | ¥147.1 (+0.6 %) |
| USD/CAD | 1.362 (+0.3 %) |
| EUR/USD | 1.075 (-0.2 %) |
| Brent crude | $77.05 (+0.4 %) |
| Gold | $2 346/oz (flat) |
- EU–US talks: Brussels still hopes for a deal before 1 Aug., but Trump’s impending letter suggests widening rift.
- Japan: Trade-deal prospects fading; yen heads for worst week this year.
- Emerging Asia: Blanket-tariff risk hammers FX; regional central banks on watch.
- Canada: Ottawa leans on USMCA carve-out after 35 % threat; dairy quotas back in the spotlight.
- Earnings season: US Q2 reports start next week, first real read-through on tariff impact.
What to Watch Today
- UK May GDP reaction in gilts & FTSE
- Canadian June jobs data vs. tariff headlines
- Euro-area final CPI (June)
- Possible Trump letters to the EU (and others) before the weekend
- Follow-through in Bitcoin and chip stocks after record prints
A sleepy Friday turned lively as Trump’s tariff machine whirred back to life, rattling currencies and futures while adding a new twist — Canada now in the firing line and Kazakhstan on notice. With macro calendars thin and US earnings season looming, traders are bracing for more tweet-driven whiplash into the weekend.
