Market commentary
Trump trade war whiplash.
President Trump’s trade war with two close U.S. allies and China is constantly in flux. Trump continues to impose, rescind, and revise tariffs at a dizzying pace, angering adversaries, baffling allies, befuddling investors, and roiling financial markets. Don’t expect this campaign to end anytime soon.
Trump trade war whiplash
The first salvo: What happened?
- Mexico: U.S. imposed a 25% tariff, automakers excluded (cars made in North America that comply with the continents existing free trade agreement).
- Canada: U.S. imposed a 25% tariff, automakers excluded
- China: An additional 10% tariff imposed on all goods.
A multi-front battle: Canada, Mexico, and China
In the military, campaigns are often characterized as large in scale and long in duration, encompassing a series of battles designed to achieve a specific objective. Trade wars can be discussed using similar vocabulary— and the war Trump has launched is just getting started.
The battlefront opened with tariff threats that materialized and disappeared so quickly that for a moment it seemed like the war was over before it began. With little warning and no time for a resolution via traditional diplomacy, Trump announced 25% across-the-board tariffs against Canada and Mexico, and additional tariffs on China (including a proposal to impose large fees on Chinese ships visiting U.S. ports). Mexico put some troops on the border, Canada paid lip service to the new administration in Washington, and China largely dismissed the whole thing, as tariffs have whipsawed between being in effect, paused, or with certain exclusions. On March 6 (the date of this writing), Trump announced an exemption through April 2 for tariffs on imported goods from Mexico that are covered by the United States-Mexico-Canada Agreement (USMCA).
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