Tariff time?

Daily update

Inside Washington DC the current focus seems to be trade tariffs, although the affordability crisis continues to be the focus in the wider economy. US President Trump suggested US consumers of imported generic pharmaceuticals would have to pay a 100% tariff from August 2027, and 200% from August 2029. The US has notably higher health care costs relative to developed European economies, and such a cost would add further to US prices.
Markets are also waiting for details of the tariffs to replace the 10% tariffs that replaced the unlawful tariffs. These new wave of tariffs should have only a limited inflation impact—the unlawful tariffs did not trigger price reductions when they were lifted, partly in anticipation of the tariffs that are now expected.
UK June inflation data is expected to show some further moderation. The electricity price increases are due to hit the July numbers. The government has announced an intention to remove the 5% VAT tax on electricity prices from October, but this is more a gesture than a substantial change in inflation.
Japan’s import data showed the effect of higher oil prices (amplified by the weakness of the yen). Exports were supported by the seemingly inexorable enthusiasm for artificial intelligence (and microchips).