Global Markets Overview: June 2025

The latest development in U.S. trade policy was on June 4, when the Trump administration doubled the tariffs on steel and aluminum imports from 25% to 50%. We expect additional sectoral tariffs in other areas to be utilized by the U.S. administration throughout 2025, with a “tariff wall” likely to be sustained for many years. The next key date is July 9, when the deadline for new U.S. trade deals with most countries is hit or higher “reciprocal tariffs” will be re-implemented. Watch this month’s Global Markets Overview video to find out more:

A recent U.S. Court of International Trade ruling – blocking the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose broad-based tariffs – is, ultimately, likely to have little impact. In principle, the decision voids 6.7pp of tariff increases implemented this year — including both the 10% baseline tariff implemented against all countries and some of the country specific measures targeting Canada, China, and Mexico — while leaving sectoral tariffs unaffected. However, the U.S. administration still has multiple alternative tariff channels, including Section 122 (temporary tariffs up to 15% for 150 days), Section 301 (retaliation for unfair trade practices), and Section 232 (sector-specific national security tariffs). We expect the White House to pivot toward these alternative tools to preserve its trade positioning and negotiating power.

Consequently, we still expect the overall U.S. tariff rate to settle at around 14% - 15%. This is significantly less than the levels reached in early April but still materially higher than the beginning of the year. In May, equity and credit markets benefited from a rebound in risk appetite, driven by a substantial (albeit temporary) de-escalation in U.S.-China trade tensions, which in turn meaningfully reduced near-term recession risks in the U.S. and globally. Bond yields also rose, most notably in the U.S.

Video transcript

Global Markets Overview: June 2025

SAFWAN MORSHED: Welcome to June's Global Markets Overview. The past few weeks have been marked by continued shifts in trade tensions, investor sentiment, and geopolitical developments. While May began with an easing in U.S.-China trade frictions, marked by a 90-day pause in tariff escalation, June brought renewed pressure, most notably with the Trump administration doubling tariffs on steel and aluminum imports to 50% on June 4.

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