US Treasury Secretary Scott Bessent expressed optimism on Fox Business about trade progress. He indicated that if the US could secure agreements with 10 or 12 of the important 18 relationships, out of a total of 20, trade might be resolved by September 1, which is Labour Day.
However, the post-Liberation Day plan’s failure suggests that this goal might be overly ambitious. The US is expected to miss the July 9 deadline, indicating ongoing issues with finalising deals.
Potential Impact on Markets
Despite uncertainty about completing all agreements, there’s a potential to have clarity on tariff levels. This stability could positively impact markets, although there’s scepticism regarding certain tariff threats being disregarded.
Fox Business’ Charlie Gasparino reported that trade deals seemed imminent, though he noted previous similar claims that had fallen through.
Trade remains a volatile area, with risks of negotiations failing or retaliations, especially in sectors like steel and automobiles.
What we’ve seen so far is an acknowledgment by Bessent of some headway in trade discussions, but also a touch of overconfidence. He laid out a fairly straightforward objective: secure deals with the bulk of top trade partners—10 or 12 out of 18 key players—by early September. The reasoning is clear; if agreements can be locked in with most of them, broader market uncertainties could ease. But we’re already watching deadlines wobble, and any delay past 9 July only underlines how much work is left undone.
The notion that tariff structures might soon become clearer offers a thread of reassurance, and it’s not without merit. Markets tend to respond well to definable outcomes, and knowing where the floor lies on tariffs—even if that floor isn’t set low—allows for a bit more predictability, a rare luxury lately. Yet, trust in speculative optimism has its limits. Gasparino flagged this on air—he’s seen similar stories unravel before, promising breakthroughs that never materialised.
Navigating Trade Negotiations
To navigate this with a degree of logic, it’s worth acknowledging that previous efforts to reach resolution have stumbled at final hurdles. There’s nothing to suggest this time will be wholly different, at least not yet. For example, steel and vehicle manufacturing remain obvious pressure points—those sectors are soaked in political attention, high margins, and long-standing disputes. Any escalation here would reverberate through global supply chains, and that ripple would not stop at raw materials.
Given how tight the windows are—July 9 and then Labour Day—traders should adjust positioning accordingly. It’s not about timing the top or bottom but about removing exposure to avoid knee-jerk reactions from sensitive sectors. Volatility seems less like a periodic guest now, and more like a long-term tenant. If we maintain a stance of flexibility, then sharp corrections or rallies in response to an announcement—or the lack thereof—won’t throw portfolios too far off balance.
Looking at recent behaviour in option pricing, there’s been a consistent premium placed on hedging plays. That signals scepticism baked into the assumptions, which aligns with statements that agreements may not capture all that was initially projected. If new guidance arrives or deadlines shift again, implied volatility could widen further. Adjust strike levels accordingly. A buffer above recent ranges is reasonable, especially with volumes clustering near expiry weeks.
In short, weigh recent signals against the proven track record of drawn-out negotiations and under-delivery. The false dawn scenario still occupies a sizable probability in forward pricing. Preparedness may not hinge on whether deals succeed, but on how convictions in the weeks ahead could oscillate just as quickly.
