Despite the alarming headlines and the frantic response from governments, the global market’s initial verdict on Donald Trump’s latest tariff threat seems to be leaning towards “more bark than bite.” This cautiously optimistic view, articulated by eToro analyst Lale Akoner, is based on the belief that the policy is a targeted tool, not a blunt instrument, and that its actual impact will be more limited than its ferocious language suggests.
The core of this argument is the exemption for companies with a US manufacturing presence. The market appears to believe that this is not just a possible loophole, but the entire point of the policy. Investors are betting that global giants like AstraZeneca, Roche, and Novartis, which are already pouring billions into US facilities, will be deliberately kept “out of the firing line.”
This explains why the market reaction, while negative, has not been catastrophic. A drop of 2% in the shares of truck makers like Daimler is significant, but it is not the kind of collapse one would expect from a truly devastating, industry-wide threat. It suggests that investors are pricing in a manageable disruption, not an existential crisis.
The “bark vs. bite” theory also helps to explain the administration’s seemingly contradictory moves. The loud “bark” of a 100% tariff is designed to grab attention and force a reaction, while the carefully targeted “bite” only affects those who have not complied with the onshoring agenda. It is a policy of loud signaling and selective enforcement.
However, this verdict is not final. The market is also hedging its bets, “closely monitoring the evolving situation.” If the administration proves this analysis wrong by applying the tariffs more broadly than expected, the market’s calm assessment could quickly evaporate, and the bite could turn out to be every bit as bad as the bark.