The White House has signed a number of notable trade deals in the months since President Donald Trump slapped sharply higher tariffs on imports in early April. But some on Wall Street are cautioning that turmoil surrounding relations between the U.S. and its major trading partners is far from over. “Our views have been at odds with the investor consensus all year – and they still are,” Andy Laperriere, head of U.S. policy at Piper Sandler, wrote in a report this summer. “The emerging narrative is that even though tariffs are high, we now have deals that will provide stability in trade policy. Therefore, economic actors can adjust to the new reality and move on,” he said. In his firm’s opinion, however, “trade stability is not in the cards.” Trump’s “reciprocal” tariffs went into effect on Aug. 7. The president had announced the sweeping levies back on April 2, and their initial size sent stocks reeling before a series of walk-backs from the White House eased investors’ concerns. Stocks have since recovered these losses and gone on to score record highs. Lately, investors have been betting that Trump won’t implement the most draconian of his trade plans, in what has come to be known as the TACO trade, short for “Trump Always Chickens Out.” But the duties that Trump announced in early April have in large part taken hold. An exception is Vietnam, as shown by Piper Sandler data. Though still high, the rate on imports from Vietnam is less than half the level Trump threatened on April 2, Laperriere said. “One of the things that I think is interesting, that I think is underappreciated is that ‘liberation day’ mostly arrived,” Laperriere said during a webinar earlier this month. “When you look at our major trading partners, most of what was put on the board on April 2 is on the board now.” Catalysts for instability Trump’s tariffs have faced significant legal challenges, with a federal appeals court judge seeming skeptical in late July of the president’s claim that he has the authority to impose new tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA), a law that grants the president authority to regulate international commerce in response to a national emergency. Trump later warned U.S. courts against blocking his tariff policy. With the ongoing litigation and unsettled backdrop, uncertainty around the future of tariffs and trade persists. “If the courts find he is overstepping his authority to impose tariffs, which is highly likely, then the deals are null and void,” Laperriere wrote in his report. “The Supreme Court is likely to rule against Trump’s use of IEEPA within the next 10 months.” One reason countries continue to negotiate is the assumption that Trump could pivot to use another authority if his IEEPA claim is struck down, said Ed Mills, managing director and Washington policy analyst at Raymond James. For example, Section 338 of the Tariff Act of 1930 — the original Smoot-Hawley protectionist legislation — allows a president to implement tariffs of up to 50% on imported goods from countries that discriminate against U.S. commerce. Trump “has a history of taking the entire legal process to run out the clock,” Mills told CNBC. “Tariffs are here to stay.” Another driver of instability is the lack of details about the trade agreements that have so far been reached. For instance, Trump announced trade deals with Indonesia and the Philippines , but the specifics have yet to be confirmed. Additionally, officials from other countries including Japan and South Korea have disagreed with Trump on the terms of their agreements, signaling they have not yet been finalized. Unsettled “Foreign officials describe the few details differently than Trump and his top advisors, so even some of the high-level features have not been ironed out,” Laperriere wrote. “These deals aren’t settled and are built in part on phony promises. They could easily fall apart.” On top of that, some trading partners, such as the European Union, are unlikely to live by their deals for very long, he claimed. Last month, Trump said that he reached a deal with the bloc , one that involves a 15% tariff on most European goods coming into the U.S. But European leaders and analysts criticized the deal shortly thereafter, calling it “unbalanced.” Meanwhile, no final agreements have been reached between the U.S. and key partners such as Canada, Mexico and China . In fact, Trump last Monday delayed imposing additional tariffs on Chinese goods for another 90 days. The president could meet with Chinese President Xi Jinping “around the [Asia-Pacific Economic Cooperation] summit” in the fall, though “what happens at that meeting is a big wild card,” Mills said. “There are going to be some countries where they’re able to get to a final agreement and other countries where they fall apart,” Mills said to CNBC. “I think that the larger the trading partner is, the more likely they are going to find a way to get to yes.” ‘Priced out’ risk Even with some of Trump’s tariffs going into effect, the stock market has soared to all-time highs this summer, underscoring optimism that the U.S. economy can withstand threats of high tariffs at home and abroad. Yet, Laperriere believes Wall Street isn’t properly accounting for the potential impacts of the duties on the economy. For now, JPMorgan projects that tariffs could result in about a 1% hit to gross domestic product. Prediction markets have been pricing out recession risk, with the likelihood down to 10% over the weekend from about 70% in May. That suggests markets were either pricing in a recession scenario that was “too high in early May or it’s too low now,” Laperriere said. “The broader tariff risk is arguably completely priced out of markets, though individual companies and sectors that would be adversely impacted by them have generally underperformed,” he wrote in a report in early August. Ultimately, perhaps, the biggest unknown remains the quixotic “Trump factor,” which can’t be quantified, Brian Gardner, Stifel’s chief Washington policy strategist, said in an interview. “He can change his mind at any given time, and has, as some of these deals have progressed,” he said. “There’s nothing to prevent him from changing his mind again down the road.”