On July 20, 2026, Raymond James published a research note arguing that U.S. stock market earnings are "resilient by construction" — meaning the indexes themselves have shifted toward companies that benefit from current policy, while the typical company underneath faces growing cost pressure.

The same week, the U.S. tariff regime reached its most aggressive level in decades. On July 20, the U.S. imposed 50% tariffs on $20 billion worth of Canadian products, including wine Reuters. On July 16, the U.S. set 25% tariffs on most imports from Brazil, effective 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 set a July 4 deadline for the EU to comply with a trade deal or face higher tariffs, including raising the EU vehicle tariff to 25% from a previously agreed 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 expiration of the blanket 10% rate appears to be a transition into a more targeted, higher-tariff structure rather than a de-escalation.

A tariff is a tax on imported goods. When the U.S. slaps a 50% tariff on Canadian wine, the importer pays that tax at the border. The cost then has to go somewhere — absorbed by the company, passed to consumers, or avoided by finding new suppliers, which takes time and money.

The Raymond James analysis and the tariff escalation connect on the level of corporate profits. Here is how: Stock market indexes like the S&P 500 are weighted by company size. A handful of giant artificial intelligence companies with high profit margins and little direct tariff exposure now dominate those indexes. Their strong earnings can make the whole index look healthy, even as the median company faces rising input costs that tariffs make worse. That is what Raymond James means by "resilience by construction" — the index itself has been built, through market forces and rebalancing, in a way that masks weaker fundamentals below.

The tariff schedule now spans three continents and multiple product categories. The 50% duty on $20 billion in Canadian goods raises the stakes for supply chains routing through Canada, especially where substitution is limited. The 25% Brazilian tariffs add another layer for importers sourcing from Latin America. The forced-labor proposal, while not finalized, would cover 60 economies — a broad net affecting companies well beyond those with direct China exposure.

For companies facing these rates, three options exist: absorb the cost and take a margin hit, pass it to consumers and risk losing demand, or restructure supply chains, which requires capital spending and time. Each path hits financial statements differently, and Raymond James suggests the index construction may be hiding how widely these pressures are spreading below the mega-cap layer.

The broader context here is what the data is doing underneath the surface. If index-level earnings are propped up by a narrow set of AI-driven giants while the typical listed company sees its earnings widen apart under tariff pressure, then index valuations may reflect a narrower range of outcomes than the broad market actually faces. Aggregate earnings beats and index-level price action can diverge sharply from the experience of the median company — and the tariff wall tightening across the same week sharpens that gap.

None of this is a directional call on stocks. It is a framing of what the numbers show beneath the index print, and what the policy path implies for the cost structure of companies that do not happen to sit in the top few weightings.