President Donald Trump announced that he would be sending letters to more than 150 countries informing them of potential tariff rates as part of his ongoing trade agenda. The letters will outline tariffs that could be set at either 10% or 15%.
According to Trump, the countries receiving these letters are primarily smaller nations that do not conduct significant trade with the United States. He emphasized that the tariff rates for this group would be the same across the board.
Tariffs to Take Effect in August
These letters are part of a broader strategy that Trump recently adopted. These include implementing new duties starting Aug. 1 if countries are unable to negotiate better terms with the United States. Originally, the deadline was July 9, but it has now been extended by three weeks, giving countries additional time to respond and possibly avoid increased tariffs.
Potential Relief for Asia and Smaller Nations
Alicia Garcia Herrero, Chief Asia Pacific Economist at Natixis, noted that the announced rates might be seen as a positive development for smaller countries, particularly in Asia, as quoted on Bloomberg.
The proposed 10% to 15% tariffs are lower than the previous threats, providing some degree of predictability and signaling that the Trump administration may be realizing the effects of the disruptions caused by excessively high tariffs.
Uncertain Outlook for Canada and the EU
In a separate interview, Trump commented on the prospects of a deal with Europe, saying that he remained indifferent to the outcome. Regarding Canada, which faces a 35% tariff on certain goods starting in August, Trump indicated that it was too early to determine the final outcome.
ETFs to Gain
Against this backdrop, below we highlight a few high-growth exchange-traded funds (ETFs) that could gain ahead as tariff threats look less severe than previously feared.We have highlighted low P/E growth ETFs that are still cheap in valuation, as the investing backdrop is still edgy. Note that the popular growth ETF Invesco QQQ Trust QQQ currently has a price-to-earnings (P/E) ratio of 39.98X.
Invesco S&P 500 Pure Growth ETF RPG – 25.99X
The underlying S&P 500 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500 Index. The fund charges 35 bps in fees.
Vanguard U.S. Momentum Factor ETF VFMO – 24.4X
The Vanguard U.S. Momentum Factor ETF seeks to provide long-term capital appreciation by investing in stocks with strong recent performance. The fund charges 13 bps in fees.
First Trust Mid Cap Growth AlphaDEX Fund FNY – 25.48X
The NASDAQ AlphaDEX Mid Cap Growth Index is an enhanced index, which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ US 600 Mid Cap Growth Index. The fund charges 70 bps in fees.
Invesco S&P MidCap 400 Pure Growth ETF RFG – 20.06X
The underlying S&P MidCap 400 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index. The fund charges 35 bps in fees.
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Invesco QQQ (QQQ): ETF Research Reports Invesco S&P 500 Pure Growth ETF (RPG): ETF Research Reports Invesco S&P MidCap 400 Pure Growth ETF (RFG): ETF Research Reports First Trust Mid Cap Growth AlphaDEX ETF (FNY): ETF Research Reports Vanguard U.S. Momentum Factor ETF (VFMO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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