📚 April 2nd was one for the investing history books. The US president called it “Liberation Day”, but for investors, it felt more like Ambush Hour. The White House rolled out hefty new tariffs on imports from more than 60 countries: a flat 10% on everything, along with “reciprocal” rates of up to 34% for China, 24% for Japan, and 20% for the European Union. The much higher-than-expected taxes sent US markets tumbling, prompting the White House to delay their implementation by three months. The extension is set to expire this Wednesday though, and investors are understandably nervous. 👀 See, over the past couple of months, the US’s grand ambitions for comprehensive trade pacts have been scaled back considerably. The White House’s initial goal of securing 90 deals has been replaced by a much more modest aim of achieving narrower "agreements in principle" with a few key trading partners. But so far, the US has only reached a preliminary trade pact with the UK and a tentative truce with China. Everyone else is angling for carve-outs that could spare them from growth-denting reciprocal tariffs – but even the lucky ones would likely still face the 10% blanket duty while talks drag on. 🔑 A key question for markets is whether the White House will stick to its Wednesday deadline or delay the tariffs yet again. The US president says he won’t even consider an extension. But his treasury secretary is hinting that talks could carry on through the rest of the summer. If they don’t, and the tariffs kick in, the effects could tip the economy into recession and unleash another bout of market volatility… |
