US Commerce Secretary Lutnick declared trade deals with Cambodia and Thailand. This announcement was made during an interview on Fox News.
These agreements were finalised before the August 1 deadline. Previously, in another trade development, Trump had secured a deal with South Korea.
Focus On Southeast Asian Trade Partnerships
This signifies a focus on expanding trade partnerships with Southeast Asian nations. The strategy aligns with the ongoing efforts to strengthen international economic relations.
With the August 1 deadline just hours away, we should brace for a significant spike in market volatility. The CBOE Volatility Index (VIX), often called the market’s “fear gauge,” has already climbed over 15% this past week to trade above 20, reflecting rising anxiety. We believe positioning for sharp, unpredictable price swings through options strategies like straddles on broad market ETFs is prudent.
We see a clear divergence trade between sectors that benefit from protectionism and those that are harmed. For instance, in July 2025, the Industrial Select Sector SPDR Fund (XLI) has quietly outperformed the retail-heavy SPDR S&P Retail ETF (XRT) as investors anticipate higher import costs for consumer goods. This suggests that buying call options on domestic manufacturers while considering put options on major retailers who rely on sourcing from countries without deals is a logical approach.
Opportunities In Emerging Markets
These last-minute deals create specific opportunities in foreign exchange and emerging markets. The Thai Baht has already strengthened by 2% against the currencies of regional neighbors like Vietnam and Malaysia in the last 48 hours. We are looking at this trend continuing as capital likely flows toward nations with secured US market access.
This situation is reminiscent of the market reactions we saw during the 2018-2019 trade negotiations. Back then, companies with complex international supply chains saw their stock prices lag, while those with primarily domestic operations were rewarded. We should apply that lesson today by scrutinizing company earnings reports for geographic revenue exposure.
