(The opinions expressed here are those of the author.)

By Alun John

July 9 (Reuters) - A look at the day ahead in U.S. and

global markets by Alun John, EMEA Finance and Markets breaking

news reporter.

Markets are processing tariff news again today, after U.S.

President Donald Trump on Tuesday broadened his trade war,

saying he would impose a 50% tariff on imported copper and soon

introduce long-threatened levies on semiconductors and

pharmaceuticals.

Trump also said he is only days away from sending one of his

tariff letters to the European Union, something the EU had been

hoping to avoid.

So far, market reaction in stocks and U.S. Treasuries has

been pretty muted, however.

Mike Dolan is enjoying some well-deserved time off over the

next two weeks, but the Reuters markets team is here to provide

you with all the information you need to start your day.

Today's Market Minute

* U.S. President Donald Trump on Tuesday said he would impose a

50% tariff on imported copper and soon introduce long-threatened

levies on semiconductors and pharmaceuticals, broadening his

trade war that has rattled markets worldwide.

* Vietnam will devise measures to improve product quality to

cope with potential risks from U.S. tariffs, as it seeks to

expand exports to other markets and reduce its reliance on the

United States, the country's deputy trade minister said on

Wednesday.

* Treasury Secretary Scott Bessent on Tuesday said the U.S. has

taken in about $100 billion in tariff income so far this year,

and this could grow to $300 billion by the end of 2025 as

collections accelerate from President Trump's trade campaign.

* Trump met Israeli Prime Minister Benjamin Netanyahu on Tuesday

for the second time in two days to discuss the situation in

Gaza, with the president's Middle East envoy indicating that

Israel and Hamas were nearing an agreement on a ceasefire deal

after nearly two years of war.

* Turkey is one of the world's fastest-growing power markets,

and exporters of natural gas and LNG have eyed the country as a

key potential growth market. But ROI columnist Gavin Maguire

says Turkey's rapid expansion of clean power supplies means gas

producers could end of disappointed.

INVESTORS' DILEMMA

How important were the stock market sell-off and ructions in

the U.S. Treasury market in Trump's decision to postpone tariffs

in April?

That has become an important question for investors now that

the first pause is over and Trump is ramping up duties again and

sending letters to trading partners telling them what their

tariffs will be - even if they don't kick in until August 1.

That's on top of the surprise copper announcement and

pharmaceutical threats.

And, if the market reaction was even partly a factor in the

April pause decision, investors now face a conundrum, and one

that is somewhat reminiscent of the game theory classic

prisoner's dilemma.

Lots of big fund managers think tariffs are bad for the U.S.

economy, and, as such, are a reason to sell stocks. If tariffs

also lead to higher inflation, which many believe they will,

that is also a reason to sell Treasuries.

However, as of now, the collective market wisdom seems to think

the bulk of tariffs will be postponed, negotiated away, or

fudged, therefore giving investors little reason to sell.

That helps explain why the S&P 500 is down less than

1% from its record peak last week. World shares are steady too,

and the Treasury market is quiet.

But here's the dilemma.

If there is no major market reaction to the newest tariff

developments, maybe tariffs will not get postponed, negotiated,

or fudged. Under such a scenario, the U.S. economy could take a

hit, shares fall, and bond yields rise sharply, suggesting

investors would have been better off selling in the first

place.

At this point, it is worth noting that copper futures in the

U.S. are at record highs after Tuesday's announcement, but metal

futures in Europe and Asia are down.

But despite the threats, pharma and semiconductor stocks

haven't moved much and, at the index level, the lack of concern

at the moment seems remarkable.

According to a UBS model, the market is effectively pricing

in zero tariff risks, and Bhanu Baweja, chief strategist at the

investment bank, thinks this is a complacent position.

Baweja, in a client note, said the tariffs had both a

"certain philosophical and ideological element", and a certain

practical element as they were needed to fill the gap left by

fiscal spending. Hence, the market should expect at least some

of them to be implemented.

Whether, and when, markets react is another question

however. And what would that mean for policy?

Chart of the day

Tariffs might not be reflected in market action, but they

are certainly there in some bits of data.

China's producer deflation deepened to its worst level in almost

two years in June, according to Wednesday numbers, as the

economy grappled with uncertainty over a global trade war and

subdued demand at home.

That piles pressure on policymakers to roll out more support

measures.

Today's events to watch

* Minutes of FOMC June meeting

* U.S. 10-year note auction

* Company earnings: Levi Strauss, Delta Air Lines ( DAL )

* Tariff developments

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.

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