Michael Browne, global investment strategist at Franklin Templeton, said that the markets regard tariffs as “over.”
“The real level of tariffs is much lower, which is one of the reasons the impact has been muted,” Browne told The Financial Times.
The other reason could be that consumers have proven far more resilient to higher prices than economists once expected.
Yet European equities as a whole closed higher, underscoring how investors now discount Trump’s tariff announcements.
The pan-European Stoxx 600 finished the day up 0.8%, with the CAC 40 in Paris up 0.97%, the DAX in Frankfurt up 0.87%, and Madrid’s IBEX 35 leading gains with a 1.3% rise.
JPMorgan strategists quickly told clients the pharma tariff was “largely avoidable” for companies that expand U.S. manufacturing.
Analysts were quick to highlight those caveats.
The White House pushed back on the “carve-out” framing, saying these are Section 232 national-security tariffs aimed at reshoring critical manufacturing.
The exemptions for companies “building” U.S. plants are temporary, intended to give firms runway to relocate production without immediately hiking prices, spokesperson Kush Desai told Fortune. He added that the 15% caps on many European (and Japanese) pharma exports reflect broader trade agreements that included “significant concessions that favor the U.S.,” not a softening of the tariff stance.
For investors, the reaction was familiar. Initial volatility gave way to a recognition that tariffs rarely land as broadly as advertised.
“It may be that inflation comes through, but there is no sign of that yet,” Browne told Financial Times.
Economists note that Americans’ willingness to keep shopping, even amid high borrowing costs, has repeatedly surprised forecasters.
As Boston wealth manager Gina Bolvin put it, the real lesson may be that “don’t fight the Fed” has become “don’t fight the U.S. consumer.”
