#Trump’s Tariff Policy#  Global stock markets are calling Trump’s bluff on tariffs.

Fourteen countries received letters from U.S. President Donald Trump on Monday, outlining steep tariff rates that will affect their goods from Aug. 1.

Global markets shrugged off the news, however, with both Asia-Pacific and Europe stocks staging a muted response Tuesday.

One reason is likely to be because of Trump’s seemingly more flexible approach to the new policies. Speaking to reporters on Monday, he labeled the Aug. 1 deadline “firm, but not 100% firm.”

US President Donald Trump has imposed punitive tariffs on 14 trading partners, but global markets are not yet paying attention to the new policies.

The president announced on Monday that he sent letters to the leaders of Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos, Myanmar, Bosnia and Herzegovina, Tunisia, Indonesia, Bangladesh, Serbia, Cambodia and Thailand. Each letter sets new tariff rates for goods shipped from that country to the United States.

The new rates, which range from 25 percent to 40 percent, will go into effect on Aug. 1.

Asia-Pacific stock markets — many of which are expected to be directly affected by the new tariffs — reacted modestly on Tuesday. Japan’s index closed the day up 0.3 percent, while South Korea’s gained 1.8 percent.

European stocks also closed higher for the first trading session since Trump’s comments late Monday.

But stocks extended losses from the previous session after President Donald Trump announced Tuesday that he would not make any exceptions to the tariffs, which are set to go into effect on Aug. 1.

That’s a far different reaction from the wild swings in April, when Trump’s initial “reciprocal tariffs” announcement triggered a global sell-off.

One reason is likely Trump’s more flexible approach to new policies. Speaking to reporters on Monday, he called the August 1 deadline “firm, but not 100% sure.”

“If [the affected countries] call us and say they want to do something differently, we’ll be open to that,” the president said.

The weak reaction from European stocks is also thought to be due to confidence that an EU-US trade deal will be reached to avoid the 20% tariffs the White House plans to impose on the bloc’s goods.

An EU diplomat said on Monday that the European Union could receive a letter from Trump by the end of the week, giving the group more time to reach a framework agreement with the White House. The broader agreement is likely to include a base tariff of 10% and could grant exemptions for certain goods such as flights and alcohol. But the diplomat acknowledged that “ultimately everything depends on Trump.”

Reports also spread on Monday that European Commission President Ursula von der Leyen had a “good meeting” with Trump over the weekend.

They seem comfortable riding Trump’s roller coaster of policymaking, but the reciprocal tariffs are a tax on business and it’s too early to assess the true impact on the economy. Perhaps things will change if we start to see a direct link in the economic numbers.