What’s going on here? Quicker than he could unpack his toiletries in the White House bathroom, the new president threatened to start stamping tariffs of up to 25% on Mexican and Canadian imports. What does this mean? These higher taxes – which could start as soon as February 1st – are part of Donald Trump’s plan to come down hard on migration and drug trafficking into the US, with the president believing the move could persuade the two countries to strengthen their border controls. The Mexican peso and Canadian dollar both slipped slightly against the greenback after the news. But Chinese markets held steady, as Trump stayed mum about any new import taxes on goods from the world’s second-biggest economy. Why should I care? Zooming in: Prepare your pockets. Higher tariffs typically lead to higher inflation: companies fold their increased taxes into product prices, meaning everyday customers cover some of the difference. Take vehicles as an example. Mexico and Canada export roughly $97 billion worth of car parts and four million finished vehicles to the US every year. With tariffs of this magnitude, Americans could see the average price of a new car increase by $3,000. And if these hikes do materialize and stoke inflation, the Federal Reserve might need to jack up interest rates again, potentially sending tremors through the economy and stock market. Don’t forget the possibility of retaliation from Canada and Mexico either, which could start a new trade war. The bigger picture: Crypto didn’t make the cut. Despite a room full of Silicon Valley billionaires to impress, the president’s inaugural address failed to address the topic of crypto. That looks to have disappointed traders of the digital currency, many of whom had been anticipating crypto-friendly policies since the election. After setting a record high over the weekend, bitcoin fell as much as 8% to $101,000 – although to its credit, it bounced back on Tuesday. | 