On July 20, 2026, the investment firm Raymond James published a report saying that U.S. stock market earnings look strong, but the strength is "resilient by construction." They mean the stock indexes have shifted toward companies that benefit from current policy, while the typical company faces growing cost pressure.

The same week, the U.S. tariff regime hit its most aggressive level in decades. A tariff is a tax on imported goods, paid at the border. On July 20, the U.S. imposed a 50% tariff on $20 billion worth of Canadian products, including wine Reuters. On July 16, the U.S. set 25% tariffs on most imports from Brazil, starting July 22 per the USTR Reuters. In June, the administration proposed duties of up to 12.5% on imports from 60 countries over forced labor concerns Reuters. In May, Trump gave the EU until July 4 to comply with a trade deal or face higher tariffs, including raising the EU vehicle tariff to 25% from 15% Reuters.

The temporary 10% global tariffs are set to expire July 24, 2026 Bloomberg. But Mike Froman, in a July 16 Bloomberg interview, said Trump remains committed to increasing tariffs despite that expiration. The 10% rate ending is not a rollback — it is a shift toward a more targeted set of higher tariffs on specific countries and products.

Think of the stock market like a classroom grade average. If two or three students score extremely high, the class average looks great — even if most students are struggling. Raymond James says that is what is happening with stock market earnings. A few giant artificial intelligence companies with high profit margins and little direct tariff exposure now dominate the indexes. Their strong numbers make the whole market look healthy, even as the typical company faces rising costs that tariffs make worse.

The tariff schedule now spans three continents. The 50% duty on $20 billion in Canadian goods raises the stakes for supply chains that pass through Canada, especially where companies cannot easily switch suppliers. The 25% Brazilian tariffs add another layer for importers sourcing from Latin America. The forced-labor proposal, while not finalized, would cover 60 economies — affecting companies far beyond those with direct China exposure.

Companies facing these new tariffs have three choices. They can absorb the cost and earn less profit. They can pass the cost to consumers and risk losing sales. Or they can find new suppliers, which costs money and takes time.

The broader context here is what is happening beneath the surface. If the market index looks strong only because a few AI giants are doing well, while most companies are under growing tariff pressure, then stock prices may be reflecting a rosier picture than the broader market actually faces. The tariff wall tightening across the same week makes that gap sharper.

None of this is a recommendation to buy or sell stocks. It is a look at what the numbers are doing underneath the headline, and what the policy path means for companies that do not happen to be among the biggest names in the index.