- Dow Jones advanced 650 points on Thursday, up 41,750.
- The Trump administration announced an initial trade deal in the UK.
- The actual details of the trade agreement still leave extensive US tariffs on most goods.
The Dow Jones Industrial Average (DJIA) gained land on Thursday, rising to more than 650 points or 1.6% at its climax after the Trump administration announced an incoming (but still not signified) trade deal with the United Kingdom (UK). Under the trade deal, most imports from the UK will still see a 10% tariff across the board, but markets will take the news as a sign that the Trump administration will continue to at least slightly walk back to its own tariffs over time.
Investors are still expecting a rapid resolution to the rising US-China trade war that steep 145% import tax on most goods from China. However, the odds of a rapid resolution to the tariffs in China remain low. According to President Trump, he had no interest in walking back to steep fees in importing Chinese goods, and the Chinese administration became slow to set up trade talks. Delegates from the two countries ended up having a preliminary meeting to discuss trading details this weekend in Switzerland. However, policy manufacturers on both sides are annoying expectations of immediate development.
Tariff deadlines precede, the development of trade deals remains slow
The July 9 deadline for self-imposed “pause” the administration administration's “pause” in its lopsided “reward tariffs” is fast approaching. The markets still have the belief that the Trump administration can paint enough trade deals whose damage from tough import tax will be reduced. However, development remained slow, and despite President Trump's insistence a few weeks ago his administration was in trade negotiations with more than 200 countries, development seemed to exist. The trade deal with the UK was announced on Thursday remains unsteady and unofficial, with Donald Trump saying that his administration should have all “very concluded” in the coming weeks.
Read more Stock News: Nasdaq progresses as Trump to announce trade deal in the UK
DOW JONES PRICE PRICE
Thursday's Bull Run runs back to Dow Jones at a high-part 200-day exponential transfer of average (EMA) near 41,600 for the first time since early April. The main equity index climbed more than 14% after a decrease near 36,615, also in early April.
Dow Jones has almost finished a full recovery from the tariff route that drags the DJIA down to 42,175 regions. However, the bullish momentum remains tepid in general, and the technical oscillators are fully pinned to excess territory, strongly indicating that Dow Jones's battle with the 200-day EMA may not have been finished.
Dow Jones Daily Chart
Tariffs FAQ
Tariffs are customs duties imposed on certain goods imports or a category of products. Tariffs are designed to help local producers and manufacturers become more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have a lot of differences. Tariffs are prepaid on the entry port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by the importers.
There are two schools of thinking about economists about the use of tariffs. While some argue that tariffs are required to protect domestic industries and address trading imbalances, others see them as a harmful tool that can potentially drive prices higher than long-term and lead to a destructive trade war by encouraging tit-for-tat tariffs.
During the presidential election run-up in November 2024, Donald Trump clarified that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada cost 42% of the US total import. During this time, Mexico stood as the leading export with $ 466.6 billion, according to the US Census Bureau. Therefore, Trump wants to focus on these three countries when imposing tariffs. He also plans to use the income generated by tariffs to lower personal income taxes.
