By Trinity Bridge

Tariffs on Trial

US President Donald Trump unveiled his latest trade tariff salvo last week, signing an executive order to impose an array of levies on goods from more than 90 countries. This follows the 1 August deadline for trade partners to strike deals with the US.

Some doubts remain over the legal basis for the tariffs. Trump has implemented them using the International Emergency Economic Powers Act, legislation typically reserved for sanctions and freezing criminal assets, rather than addressing trade imbalances.

Meanwhile, the US Federal Reserve kept interest rates unchanged at 4.25%–4.50% at the latest meeting of the Federal Open Markets Committee.

In the UK, retailers continue to face a challenging summer. A downbeat survey from the Confederation of British Industry reported that retail sales volumes declined for the tenth consecutive month. Although July’s reading was an improvement from June, it still fell short of expectations.

Other Insights

Microsoft Joins the $4trn Club

US tech giant Microsoft has become the second publicly traded company, after Nvidia, to surpass a $4 trillion market capitalisation following a strong earnings announcement.

Nvidia’s Growing Dominance

Nvidia now represents 8% of the S&P 500’s total market value, equating to around $4.3 trillion of the index’s $53 trillion — the same as the combined size of the entire healthcare and industrial sectors.

US Trade Deficit Hits 22-Month Low

The US trade deficit in goods fell 11% to $86 billion in June, the lowest in nearly two years, as firms adapt to the evolving trade tariff landscape.

China Pushes to Boost Birth Rate

The Chinese government is offering parents $1,500 per child in a bid to reverse its declining birth rate, a decade after ending the one-child policy. Demographic challenges continue to weigh heavily on the nation’s long-term growth outlook.

UK’s Just Group Acquired

Canada’s Brookfield Wealth Solutions has agreed to purchase Just Group for $3.2 billion, representing a 75% premium to its last closing price. UK Chancellor Rachel Reeves welcomed the move as a sign of “strong faith” in the UK economy.

UK Supreme Court Ruling on Car Finance

The UK Supreme Court has overturned a Court of Appeal ruling, limiting the potential for large-scale compensation claims over the mass mis-selling of car finance loans. The Financial Conduct Authority (FCA) is, however, considering a potential compensation scheme worth between £9 and £18 billion.

UK House Prices Edge Up

House prices rose by 0.6% month-on-month in July, with annual growth accelerating to 2.4%, according to Nationwide Building Society. This marks a return to growth following a notable dip in June.