Global markets have largely been indifferent to U.S. President Donald Trump’s latest tariffs, a sharp departure from the steep selloff triggered by his April 2 announcement of “reciprocal” duties, as investors grow increasingly numb to what they see as a negotiating tactic. In recent days, the U.S. rolled out new tariffs of 10% to 15% on imports from the EU, Japan, and South Korea, while levying higher 20% duties on products from Taiwan, Vietnam, and Bangladesh. The MSCI All Country World Index, which measures the performance of over 2,500 stocks from both developed and emerging markets, inched higher by around 1.8% since Aug. 1, data from LSEG showed. China’s CSI 300, and the 225-stock Nikkei 225 index in Japan also rose more than 1% and 2.5% respectively during this period. India, targeted in part over its continued purchases of Russian oil, saw its tariffs jump from an earlier 25% to 50% on Wednesday on a broad range of goods . The country’s benchmark Nifty 50 barely budged in response. Similar resilience was seen in Europe, with the Stoxx 600 posting gains in recent days on corporate earnings, shrugging off the tariff threats. “There is a bit of numbness coming through. I think there’s also a lot of precedent in terms of things being announced and then rolled back later,” said Steve Brice, global chief investment officer at Standard Chartered Bank’s wealth solutions unit. “People are looking at the situation and saying, okay, yes, we’ve seen these increases in tariffs coming through… but they can be unwound by further trade negotiations. Therefore, it’s less of a shock to people now,” Brice told CNBC. Typical safe havens also saw a muted response since Aug. 1. The yield on the U.S. 10 year Treasury lost over two basis points across the same period of time, and the U.S. Dollar Index, which measures the strength of the greenback against a basket of currencies, slipped under 2% to 98.11. Spot gold prices rose nearly 3%. This stands in stark contrast to the global market rout that followed Trump’s April 2 tariff announcement, when investors rushed out of U.S. equities and bonds, sending gold to hover near all-time highs while the dollar slipped. Stocks tumbled in the aftermath — the U.S. S & P 500 sank roughly 12% between April 2 and April 8, while the MSCI World Index excluding the U.S. dropped more than 8%. Investors’ indifference towards Trump’s tariff threats recalls a term for his pattern of announcing hefty tariff threats that jolt markets, only to scale them back or delay them, which was coined as “Trump Always Chickens Out” — or TACO . On April 9, the president stunned investors after he announced a 90-day pause in some of his “reciprocal” tariffs and slashed duties to 10% for nearly all U.S. trading partners, sparking one of Wall Street’s biggest rallies . The markets bought into Trump’s rhetoric in April when he said that his initial tariff positions were his final offer, which explains why equity markets fell heavily, said Hugh Dive, chief investment officer at Atlas Funds. “Subsequent events have seen the U.S. backtracking on its initial positions, which are now seen as the start of a negotiation,” he added. DBS Bank’s managing director Taimur Baig, echoed a similar stance. “I think the markets are becoming a bit numb to the permanent volatility on these issues,” he said, adding that markets attempted to price these in back in April and May, but pauses and repeated negotiations since then have made the markets “incapable of pricing it in any concrete manner.” “The market is just not capable of pricing it in because of the chronic uncertainty,” he said. The shift in investors’ portfolios has also played a role, according to Brice. Earlier this year, many investors were overweight U.S. assets, so the April selloff saw them cut those exposures rapidly, contributing to the steep drop . Now, their exposure to U.S. assets is largely neutral, he said. “So, the need for people to take risks off the table in the U.S. is lower today,” he said. Even so, traders should not completely disregard longer-term risks. Atlas Funds’ Dive warned that tariffs could continue to undermine business investments by introducing policy uncertainty. For example, any investment decision to move manufacturing to the U.S. to benefit from tariff protections is not made lightly, he said. On Wednesday, Trump announced he would impose a 100% tariff on chip imports, with an exemption for companies that are “building in the United States.” “Building a plant may cost hundreds of millions. What happens if the tariffs are removed in 3 years’ time? This investment may have to be written off,” said Dive.
