TL;DR

U.S. imposes 50% copper tariffs, copper hits record; U.S.-EU near 10% tariff pact; Red Sea shipping risk rises.

Highlights

• Trump imposes a 50% tariff on all U.S. copper imports, sending copper futures up 13% to record highs; 200% tariffs on pharmaceuticals signaled, with a grace period 1.
• U.S. announces 25% tariffs on Japanese goods amid stalled rice market talks; Japan faces domestic pressure ahead of Upper House elections 2.
• U.S. threatens 200% tariffs on $2B of Australian pharmaceutical exports over drug pricing; Canberra seeks clarity 3.
• U.S. and EU near a temporary pact to cap most reciprocal tariffs at 10%, aiming to avoid broader escalation 4.
• Malaysia cuts policy rate by 25bps to 2.75%, citing U.S. tariff risks and subdued inflation 9.
• Houthi attacks sink two Greek-operated ships in the Red Sea, killing four crew; shipping risk premiums may rise 5.
• Russia launches a record 728-drone and 13-missile attack on Ukraine; U.S. resumes arms shipments, including Patriot missiles 610.
• Lithuania and Finland exit the Ottawa Convention to produce anti-personnel mines for Ukraine and domestic defense 11.
• China’s June CPI turns positive (+0.1% y/y), but PPI drops 3.6% y/y; 2025 GDP projected above 140 trillion yuan 1314.
• UAE warns global spare oil capacity is shrinking as OPEC+ supply hikes are absorbed by demand 12.
• Merck acquires Verona Pharma for $10B to expand its respiratory drug portfolio 16.
• Boeing June deliveries rise 27% to 60 jets as China reopens its market 15.

Commentary

Trade tensions remain the dominant theme, with the U.S. sharply escalating tariffs on copper, Japanese goods, and threatening pharmaceuticals from Australia 123. The copper tariff sent futures to all-time highs and lifted U.S. mining stocks such as Freeport-McMoRan , but downstream manufacturers and global supply chains face higher input costs and volatility 1. The pharma tariff threats, though delayed, create uncertainty for exporters in Australia and potentially other countries, adding pressure to healthcare equities 3.

The U.S.-EU provisional agreement to cap most tariffs at 10% provides some relief for transatlantic trade, but unresolved disputes in autos, steel, and agriculture mean headline risk persists 4. Japan and Australia are under pressure to defend domestic sectors as political timelines complicate negotiations 23. Malaysia’s rate cut is a direct response to external trade risks and subdued inflation, signaling that other EMs may follow with policy easing if trade headwinds intensify 9.

Geopolitical risk is elevated. Renewed Houthi attacks in the Red Sea have sunk two ships and killed crew, likely pushing up insurance costs and freight rates, with shipping equities and oil markets sensitive to further disruptions 5. Russia’s record drone and missile barrage on Ukraine, and the U.S. resumption of arms shipments, keep defense and safe-haven assets in focus 610. Lithuania and Finland’s exit from the landmine ban to supply Ukraine underscores rising NATO-Russia tensions 11.

China’s macro data remains mixed: consumer inflation has turned marginally positive, but persistent producer price deflation and external tariff pressures increase the likelihood of further policy support 1314. The UAE’s warning on shrinking spare oil capacity highlights ongoing supply-side risks for energy markets 12. In corporate news, Merck ’s $10B acquisition of Verona Pharma and Boeing ’s rebound in deliveries as China reopens both support sector sentiment 1516.

Traders should monitor copper and oil price moves, Asian FX and rates, and ongoing trade negotiations for signs of escalation or relief. Exporters in Japan, Australia, and Malaysia face continued headline risk, while U.S. miners, defense, and select industrials may benefit from current policy trends 12391011.