Tariff uncertainty beginning to concern business

There has been a lot of support for the Donald among the business world. Two things have bothered the business community. Adopting Biden’s anti trust policies, highly unpopular and reactionary, surprised executives. My guess is this is one bill that has to be paid for a lot of labor support during the election.

The second is Tariff policy, of necessity hard to predict, but doubly so when the market listens to Trump’s negotiating utterances. Many are clearly never going to happen, but there is a randomness about all this.

Trump is right to call out the differences in tariffs and other taxes levied on US goods, versus goods coming to the US. But the market would appreciate a few principles.

First Principle should be equality between trading parties, although it’s hard to define exactly which taxes should be included…eg VAT which effects both imports and domestic goods.

Second Principle should be immediate action to acheive that equality,

Third principle should be transparency. So a regime of firstly establishing the targeted adjustment and then a period of time to equate tariffs, three years would be realistic and give businesses a time to adjust supply chains.

if he announced that today a lot of the criticism would evaporate and the markets would stop falling, which in itself is beginning to erode support.

Trump has stated very clearly that he wants reciprocal tariffs.

Next he will use tariffs to stop countries Mexico and Canada sending drugs and invaders over the borders.

Mexico has already agreed to extradite to the US infamous cartel members for trial in America. Some 28 felons all in all.

Doubtless Mexico and Canada will stop the flow of Invaders and drugs into the USA otherwise the tariff start on March 4th I think it was.

Again this is a superb use of tariffs.

Then there is the question should there be a tariff for countries to have access to the biggest market in the world.

What is certain is that Trump unlike Globalists like Biden and Nikki Haley will do what is best for America and will end all the war mongering etc.

In a move that screams “please don’t tax us!” Mexico has handed over 29 drug lords to the U.S.

This is including the infamous Rafael Caro Quintero.

This mass extradition comes as President Trump dangles a 25% tariff over Mexican imports.

It’s a game that Trump can play all day and Mexico finally is playing ball.

The wins keep rolling in, no matter how much these foreign leaders throw tantrums.

Many countries are unhappy with globalisation and want to return to protectionism..

That is all fine, but there should be a grace period to adapt to changes.

Making a sudden knee-jerk reaction is never going to be good.

Although most Americans will be happy with the tariffs that will boost US job growth with less imports.

The stock markets are not happy as it will reduce international trade.

The markets are simply afraid of stagflation.

They were expecting quantitative tightening to be over by now. I think that the massive positivity brought on by Trump's win is what brought the inflation numbers up again.

Hopefully all the tariff talk etc will have kicked and the those numbers come down in March.

The Fed minutes at least seemed to indicate tightening would end sour the middle of the year and QE might kickoff in 2026.

TLDR: Quantitative tightening hasn't ended and the markets are still semi risk off. That'll change in June.