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Trump Targets More Countries

đź“ť Tariff madness has returned as Donald Trump announces tariffs on many countries, including South Korea, Japan, and South Africa.

Author

Ankit Sinha
July 08, 2025

Silver banana goes to…




In this issue of the peel:

  • đź“ť Tariff madness has returned as Donald Trump announces tariffs on many countries, including South Korea, Japan, and South Africa.

  • 📉 Markets plunged, the dollar rose, and longer-term treasuries took a hit in response to the tariffs, which are set to go into effect on August 1st. 

  • đź’¸ A study conducted by the Fed shows a 9% chance that the Federal Funds Rate could hit zero in the next 7 years. 

Market Snapshot

Student Spotlight

A+ Equity Research Report đź“Š

Looking for a stellar example of what makes an equity research report stand out?

One of our WSO Academy students, Colin Baird-Taylor, put together an impressive deep dive on MercadoLibre, covering valuation, catalysts, and key risks with the kind of insight that turns good pitches into great ones. Check out the report here.

The Daily Poll

What’s more important for the market right now?

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Previous Poll:

Do you think the June jobs report is actually a strong signal?

Yes, strong: 23.4% // Somewhat: 25.9% // Overhyped: 27.2% // Misleading: 23.5%

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Macro Monkey Says

Tariff Talk Trips Up Wall Street

Yesterday, President Donald Trump set sweeping tariffs on South Korea, Japan, and South Africa. Trump placed a 25% tariff on all goods from Japan and South Korea, and a 30% tariff on all goods from South Africa. 

Trump also set 25% tariffs on Malaysia and Kazakhstan, and 40% tariffs on Laos and Myanmar. In response to the tariffs, the major indices fell from their all-time highs, with the NASDAQ and the S&P marking losses just shy of the 1% mark. 

Since these tariffs have not been put into effect yet, it gives companies that manufacture in those countries an opportunity to import their goods tariff-free during the next few weeks. 

The August 1st date also gives the European Union and the U.S. more time to iron out their trade deal, which the previous deadline was July 9th, now being extended to August 1st. 

None of the countries Donald Trump has placed tariffs on have announced any kind of reciprocal tariffs. If reciprocal tariffs are announced to any effect, that will likely have a considerable negative effect on the markets. 

The dollar also rose in response to the increased tariffs, and the currencies of the tariffed countries witnessed a sharp decline. This can be somewhat attributable to the fact that uncertainty often favors the dollar due to its overall stability. 

Additionally, U.S. Treasury yields, especially for longer-term bonds, rose in response to the tariff news. 

The Takeaway?

While the market did lose some momentum today, these tariffs likely won’t cause a larger market selloff unless reciprocal tariffs are put into place, which, while possible, is unlikely. The future performance of the market is also likely to be dependent on the European Union and the U.S. arriving at a mutually beneficial trade deal, which had been extended to August 1st.

Career Corner

Question

I was wondering if anyone has any tips on Blackstone’s PyMetric online games? I know they say there isn’t a right answer, but I assume they want the individual to be of a specific type and demonstrate certain skills more than others.

Answer

It’s hard to “game” those assessments, but they generally tend towards skills that are important as a junior in finance (analytical, hardworking, team player, proactive…).

Head Mentor, WSO Academy

What's Ripe

Enovix Corporation (ENVX) 14.4% 

  • Enovix Corporation, a lithium-ion battery manufacturer, saw its stock price rise considerably after they announced a share buyback program, enticing shareholders to buy the stock. Enovix announced that the buyback program would be valued at $60 million, which is about 3% of their entire market cap. 

Rocket Lab Corporation (RKLB) 9.0% 

  • Rocket Lab’s stock skyrocketed today after Elon Musk, CEO of SpaceX (a competitor of Rocket Lab), announced that he would be forming his own political party, prompting investors to put their faith in other space exploration companies. Additionally, banks like Key Bank and Needham increased their price target for Rocket Lab, propelling investor confidence.

What's Rotten

Core Scientific Inc. (CORZ) 17.6%

  • Core Scientific’s stock price plunged yesterday after CoreWeave announced they were acquiring Core Scientific in an all-stock deal. Investors were extremely speculative about the culture and IT integration of the two companies and their ability to make the acquisition successful, causing investors to sell.  

Silicon Laboratories Inc. (SLAB) 9.0%

  • Silicon Laboratories, a semiconductor designer and manufacturer, witnessed a significant decline in their stock price after Barclays slashed their price target to $80, which is significantly less than their current share price of about $140. Additionally, Silicon Laboratories has had negative net income for several years now, further eroding investor confidence.  

Thought Banana

Zero Rates? Fed Puts Odds at 9%

According to research done by the Federal Reserve Banks of New York and San Francisco, there is about a 9% chance that the Federal Funds Rate will hit zero in the medium term (next seven years). 

The Fed chalked it up to overall economic uncertainty regarding the future, especially in light of tariffs. Despite this, the short-term expectations for the Federal Funds Rate are actually quite high, with only a 1% of rates hitting zero in the next two years. 

The Federal Funds Rate will only enter zero territory when there is either a severe economic recession, a disruption within the financial markets causing emergency liquidity support (2008), or inflation falls well below 2%, risking deflation. 

The Fed will only put rates at zero if they need to bolster demand in order to stimulate the economy. The Fed rarely sets the Federal Funds Rate to zero, and when it does, the circumstances are typically dire. During the 21st century, they’ve only set rates to zero twice. 

In 2008, the housing market crashed, and major financial institutions needed liquidity support, which caused the Fed to cut rates to zero. In 2020, during the COVID pandemic, the Fed also cut rates to zero in order to raise demand and stimulate the economy. 

Rates will definitely not hit zero unless there is some kind of major economic event, whether that be an economic recession or some other major economic event that spurs the U.S. economy out of control. 

The Takeaway?

While the likelihood of the Fed setting rates at zero even in the medium term is highly unlikely, it is never out of the picture, as markets can crash quicker than you can snap your fingers. Regardless, the U.S. economy is seemingly in a healthy place despite some economic uncertainty, with a sustainable labor market, as well as controlled inflation and unemployment rates for the time being.

The Big Question: What kind of economic chaos would it actually take for the Fed to pull the zero-rate trigger again?

Banana Brain Teaser

Previous

If (1/x) - [1/(x + 1)] = 1/(x + 4), then x could be?

Answer: ±2

Today

X, Y, and Z each try independently to solve a problem. If their individual probabilities for success are 1/4, 1/2, and 5/8, respectively, what is the probability that X and Y, but not Z, will solve the problem?

Send your guesses to [email protected]

âťť

Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.

Bernard Baruch

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Happy Investing,
Chris, Vyom, Ankit, Mithun, Colin & Patrick