Don't be misled by the summer rally in the US stock market! Deutsche Bank warns: the impact of tariffs and immigration policies is far from over.

This summer, the US stock market has performed strongly, with the benchmark S&P 500 index accumulating nearly 9% in gains, rebounding significantly from its spring low. Looking back at April, market volatility was triggered by the implementation of President Trump's "Liberation Day" tariff policy. However, as summer comes to a close, Deutsche Bank warns that the ongoing effects of these policies will continue to be felt. Additionally, the investment bank warns of an impending "immigration policy impact" on the US labor market. George Saravelos, Director of Foreign Exchange Research at Deutsche Bank, said on Tuesday: "After negotiations on various trade agreements throughout the summer, the final direction of US tariff policy has gradually become clear. Does this mean that its impact on the macroeconomy and markets has ended? We are skeptical. The most direct indicator of the economic impact of tariffs is the amount of actual taxes collected by President Trump at the border. Currently, the 'yield' from tariffs is approximately 10% of the value of imported goods." The analyst added: "However, based on pre-trade war import patterns, the actual tariff rate is likely to stabilize in the 15%-20% range (depending on the final tariff rates for chips and cars and the effect of import substitution)." Saravelos further explained: "We believe that the main reasons for the currently low tariff yield include the re-export trade effect (especially for Chinese goods) and the concentration of duty-free imports for pharmaceuticals and electronics. As these temporary factors fade, the actual tariff yield will gradually approach the tariff rate level estimated based on the 2024 trade landscape." From a fiscal perspective, he analyzed: "With a $3 trillion import scale, a 15% increase in the actual tariff rate is equivalent to an additional $450 billion in tax revenue, tightening GDP by 1.5% through fiscal means. Our previous research has confirmed that these costs will primarily be borne by the United States." The bank also warned that due to the shortage of immigrant labor causing supply shocks, the US non-farm payroll growth will suffer significant impact. Saravelos said: "Negative supply shocks will have a dual impact on spare capacity, unemployment rates, and monetary policy. But it is certain that it will have a negative impact on economic growth. The current non-farm employment growth rate has reached levels that usually signal an economic downturn." The analyst added: "In addition to the reduced number of immigrants, the termination of several work visa programs in the Biden era in the coming months will further impact the labor market. Just the TPS and CNHV programs for Haiti alone involve over 700,000 people."