Deeper dive: Why are markets ignoring elevated tariff rates?

It was only months ago that markets freaked out over double-digit tariff rates, but that appears to be no longer the case. The S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) has continued a record roll since Vietnam agreed to a 20% U.S. tariff earlier this month [https://seekingalpha.com/news/4464850-stock-market-news-today-nasdaq-sp500-dow-jones], while equities climbed further after a 15% tariff was imposed on Japanese goods last week [https://seekingalpha.com/pr/20174498-us-stocks-hit-more-records-following-us-japan-trade-deal]. Futures are once again pointing higher following a weekend trade deal between the U.S. and the EU that imposed a 15% baseline tariff on the latter's exports. _See the full details here [https://seekingalpha.com/news/4472565-u-s-and-eu-reach-tariff-deal-avoiding-major-trade-clash]_

_Thought bubble: _The agreements will bring heavy investment into the United States, while aiming to reshore America's industrial base that had moved overseas. They also avoid the prospect of an all-out trade war, giving investors clarity on how things will play out on the trade front. Stock markets of countries getting hit with the higher levies have also soared in response, as the new tariffs - even if elevated - were less than the hefty "Liberation Day" rates unveiled back in April.

"Today's deal creates CERTAINTY in uncertain times," EU President Ursula von der Leyen declared, bringing up the key word that markets love the most. "It delivers stability and predictability for citizens and businesses on both sides of the Atlantic... 15% is not to be underestimated, but it is the best we could get."

BLUEPRINT: Much of Trump's strategy playbook has been transplanted from the world of real estate to international trade. That includes _Art of the Deal_ concepts like his negotiating style of "aiming very high, and then pushing and pushing to get what I'm after" and "sometimes, part of making a deal is denigrating your competition." It also involves getting press by doing things that are a "little outrageous, or bold or controversial," but most importantly, making sure that there is enough leverage to not "seem desperate."

_WALL STREET BREAKFAST SURVEY:_ Now that notable deals have been locked in, are you a believer in Trump's trade strategy? Take the poll here [https://forms.gle/J6oT9ZPet26HyUTbA] and share how it might continue to impact markets in the comments section.

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