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Trump again pulls out the tariffs card – does the market already know the plot?
We've seen this movie before. 🔎
According to Financial Times, President Trump is preparing to announce 10% tariffs on dozens of countries this week, just as the current tariffs are set to expire at the end of the week. 🛡
But behind the headline lies a bigger story.
Trump's advisors warned him against too aggressive an expansion of the trade war. ⚠️
Their concern is simple: another shock to the economy could come at a sensitive time, months before the midterm elections, and weigh on consumers, inflation, and the markets.
At the same time, the administration is already working on additional investigations that could provide it with a legal basis to impose even higher tariffs in the future. 🚩
In other words, the 10% may only be a first step in a broader move. 💥
The implication for the markets is clear: 1️⃣Uncertainty surrounding global trade returns to center stage. 2️⃣Companies with international supply chains may face higher costs. 3️⃣The fear of renewed inflationary pressures could also affect interest rate expectations.
Last time, the market panicked, fell, and only recovered when Trump backed down, ❌
This time, investors are more experienced - but if tariffs continue to climb beyond 10%, the market may find that the familiar movie is returning.. 👀
The market may already know the script, but it still doesn't know what the final scene will look like. 🚨