US trade policy remains central to the global economic outlook, with July ending in a fresh round of tariff announcements. While the US has reached broad agreements with major partners like the EU and Japan, the new 15% baseline tariff still marks a sharp departure from pre-Trump norms. Although markets welcomed the avoidance of a full-blown trade war, the inflationary and growth effects of these tariffs remain a key risk.
So far, global growth has held up better than expected. Early stockpiling, strong private balance sheets, and AI-driven investment have helped cushion the initial impact. Outside the US, central banks have provided further support by cutting rates. In this context, corporate earnings have proven resilient despite tariff uncertainty, a key factor supporting recent market performance.
In South Africa, growth expectations have been revised lower following US tariffs on key exports. Still, falling inflation and a rate cut by the Reserve Bank are providing some relief. The SARB’s decision to target the lower end of its 3% – 6% range could support longer-term market stability if successful.