New Tariffs, Old Tensions

Daily Updates:

• President Trump announced new tariffs implementations yesterday, hitting nine Asian countries out of 14 recipients.
• Cambodia, Bangladesh, and Laos saw modest reductions, but still face significant tariffs in the 35-40% range – well above Vietnam’s 20%. 
• Meanwhile, Japan, Korea, Thailand, and Malaysia received higher or unchanged rates, reflecting frustration over procured trade negotiations. 
• The tariffs are set to take effect from August 1 with no further extensions 
• A 50% tariff on copper imports was also announced by Trump. In a more aggressive move, he threatens tariffs of up to 200% on pharmaceutical imports, though implementation is expected to be delayed by 12 to 18 months to allow the industry time to adjust.

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• While the President noted that in recent trade talks with the European Union, EU leaders have been “very nice”, he also acknowledged that the EU had previously “treated us very badly,” even describing the bloc as “in many respects much worse than China.” 
• However, he emphasized a shift in tone, stating that the EU is now engaging more positively.
• Trump also indicated that the U.S. is probably “two days off” from sending a formal tariff letter to the EU, signalling potential new trade measures while leaving the door open for further developments.

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• Moreover, he stated that the U.S. will “pretty soon” impose a 10% tariff on imports from BRICS countries. President Trump reiterated that BRICS nations are attempting to undermine the U.S. dollar’s global dominance.
• Trump has not set a specific date for the tariff’s implementation, but indicated that it would be triggered by anti-American policies.

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• President Trump announced on Truth Social yesterday that a new Council of Economic Advisers (CEA) study, led by Dr. Stephan Miran, finds tariffs have had no impact on inflation. He added that import prices are falling and tariffs are driving growth with “new factories, jobs, and trillions in investment entering the U.S.”
• Trump also criticized Federal Reserve Chair “Too Late” Jerome Powell, accusing him of overstating inflation risks and calling for immediate interest rate cuts.

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• The NFIB Small Business Optimism Index in the US dropped to 98.6 in June, below expectations and May’s 98.8, though still slightly above the long-term average. 
• A rise in reported excess inventories weighed on sentiment, while tax concerns climbed, with 19% owners citing it as their top issue – the highest since 2021.
• The net share expecting higher real sales fell three points to 7%, and those planning capital outlays over the next six months declined to 21%, down one point from May.

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• In Tuesday’s trading session, the Dow fell 0.37% and the S&P 500 slipped 0.07%, while the Nasdaq Composite edged up 0.03%. Consumer staples, utilities, and financials underperformed, while energy, materials, and healthcare sectors led the gains.

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• As with US equities, crypto-currencies remain largely unmoved on the day –BTC is trading at $108.7K, down 0.17%, while ETH is up 0.29%, holding above $2,600.
• BTC short-tenor implied volatility has continued its march lower during the period of inactivity, with short tenors reaching back below 30% overnight. ETH’s term structure, in contrast, has flattened with all tenors ranging between 59% and 63%.
• This pattern continues the trend that we have consistently highlighted throughout 2025 – one of ETH volatility dramatically outpacing that of BTC in both realised and implied terms.

• There is less of an obvious divergence in the directional sentiment between the two largest crypto-currencies – while BTC’s futures markets express a slightly more bullish tilt than ETH (with higher funding rates in the last month and a larger futures premium), volatility smile skews remain similarly skewed slightly towards OTM calls across the term structure.

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• Proposals for Solana, XRP, and Dogecoin ETFs are under consideration, with recent SEC feedback focusing on technical details like staking.
• The change reflects a more pro-crypto stance at the SEC, backed by political support and new leadership.
• Issues are racing to launch diverse crypto funds, with innovative products like the Rex-Osprey SOL + Staking ETF already entering the market, said Gregory King, founder and CEO of Osprey Funds and Rex Shares.

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• GameSquare Holdings, Inc. (Nasdaq: GAME) a gaming, esports, and digital media technology company has announced an $8M underwritten public offering which will be put towards the creation of an Ethereum treasury. GameSquare's Board has approved an ETH treasury allocation of up to $100M.
• Once acquired, the ETH will be deployed in a yield generation strategy via Medici, Dialectic's Ethereum-native investment platform that uses AI and risk controls to generate high on-chain yields, targeting 8-14% APY.

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• DeFi Dev Corp. (Nasdaq: DFDV) has announced the further purchase of 47,272 SOL at an average purchase price of $149.09 (approximately $7.03M) bringing their total  holdings to 690,420 SOL as of July 8, 2025.

This Week’s Calendar:

Charts of the Day:

Figure 1. BTC futures-price implied premium above spot (annualised) at selected tenors. Source: Deribit, Block Scholes

Figure 2. ETH futures-price implied premium above spot (annualised) at selected tenors. Source: Deribit, Block Scholes

Figure 3. BTC at-the-money implied volatility term structure. Source: Deribit, Block Scholes

Figure 4. ETH at-the-money implied volatility term structure. Source: Deribit, Block Scholes