Time to get a Thesaurus
Removing tariffs just as quickly as President Trump thought to impose them is surely removing any elegance associated with Trump’s ‘favourite word in the dictionary’. On second thoughts, there likely never was any. In the two weeks that have passed since the President’s inauguration the tariff story goes something like this. On 20th Jan, the date of Trump’s inauguration, dozens of executive orders were signed. Tariffs are notably excluded allowing risk appetite and growth expectations to flourish.
Such an environment has proved to be positive for equities but negative to the US Dollar and bond prices. On Friday reports began to emerge that the White House was seeking to enact the foreshadowed tariffs on the weekend. On Saturday that happened – 25% a piece for Canada and Mexico and 10% for China. The time such tariffs was due to come into effect was just a few hours ago, at 5:01 GMT. As of that time this morning, only goods imported from China face new tariffs. This follows reports yesterday afternoon that the tariffs due to be imposed on Canada and Mexico would be delayed by one month.
There’s a lot to be read into these ‘concessions’, far too much in fact for this brief. In short, the market will be considering whether yesterday’s extension to the tariff impositions might evolve into a discontinuation of tariffs altogether. This is because the offers for which the tariffs were suspended – I.e posting (10,000) troops to respective borders and cracking down on the import of synthetic opioids into the United States – were already either in force or due to come into force. In other words, Trump appeared to be saying I’ll back down if you continue to do exactly what you’re already doing. Markets corrected following their gap lower with the Mexican Peso even recovering all ground lost to the Dollar over the weekend.
Discussion and Analysis by Charles Porter
Related Insights
Daily Brief – Where’s the Trump Put?
Charles Porter
Thu 13 Mar 2025
Where’s the Trump Put? On Tuesday Trump went some way towards remediating for his comments that appeared to show a disregard for a recession over the weekend. In a Fox News interview on Sunday the President declined to rule out the prospect of a recession, contributing to the stock market decline come Monday. For what […]
Daily Brief – Change of heart?
Charles Porter
Thu 6 Mar 2025
Change of heart? Over the last 24 hours the market has decisively reframed its position of tariffs. Its ability to reshape the logic of tariffs is likely a result of the heightened volatility and risk witnessed throughout the market. The outcome is as follows: tariffs whilst ordinarily and previously thought to be inflationary and a […]
Daily Brief – EURUSD rotation
Charles Porter
Tue 11 Mar 2025
EURUSD rotation EURUSD has made a dramatic U-turn from the inevitable grind lower to parity most analysts were predicting. A stronger Dollar come year end is still not being removed from the base case by most. However, its current momentum higher stands in defiance of that outcome. However, as we are seeing now, there are […]
