The president closed the two -day war, a long breath campaign that did not go from a lightning skirmis. Firm advance with China. From the superb Trump Rally that motivated his triumph at the polls in November, there is nothing left.
What Vadis, Trump? This is the chronicle of a long announced war (and quickly suspended on the border). The president fulfilled his word, after an evasive extension of one month. And he went to the war of tariffs with his two main commercial partners, Mexico and Canada. He attacked with thick ammunition: an aliquot of 25%. He did not respect the letter of the Free Trade Agreement – the USMCA – that he wrote in 2020 as a NAFTA replacement. To fulfill his recent word, his solemn previous commitment (“the best commercial treatise in history”, according to its author), operated. There is no more space for negotiation, he said on Monday, relentless. At the indicated time, on Tuesday, The new tariffs entered into force. And the markets creaked. The anguish that its implementation causes a frontal shock of the economy.
That same day, in the afternoon, the Secretary of Commerce, Howard LutnickI already saw some loophole to talk. The taxes could go down, perhaps in half, if the countries showed Trump a decrease in prohibited drug flows. “This is the Fentanyl War, he clarified, not the War of Commerce.”. On Wednesday, without proof by, Washington ordered that the levies to the automotive industry are suspended for another month. Later the initiative extended to Mexico that, with insight, had delayed the dissemination of reprisals until Sunday. Canada, who immediately responded with a countermeasted package, did not want to know anything. Or Trump gave up the tariffs definitely, or the retaliation was still in place. On Thursday, the President – unilaterally – decided to also exceed Canada, for a month.
Trade in the Trump era: The two -day war
And so it closed The two -day war, a long breath campaign that did not go from a lightning skirmish. He culminated giving sorrow and without glory. Of course, the importation of the products of the neighbors who are not covered by the USMCA treaty were taxed at 25%. And Friday Trump, stainless, promised to ram against dairy and wood from Canada. Today, finally, in retaliation, the province of Ontario will charge an overcharge of 25% to the electricity that exports to three US states: Michigan, New York and Minnesota.
Wall Street always thought that Trump’s tariff bravery was a Bluff, a hoax. The president showed him this week that it is his real intention. And also that it fails to execute it without anxiety in the maneuver. It is not a buff, Trump does not lie; but a gaffe. He wants, but he can’t. It lacks capacity. And I didn’t know, that’s why he tried and failed with a crash. But soldier who flees, serves for another war. Trump did not give up, he will insist. Wall Street anticipated the Bluff three Wednesday ago when the S&P 500 nailed its last record. Putting in prices the impericia and the tozudeness already invoiced a correction – a 10% drop from the maximums – in the Russell 2000, the Nasdaq 100 and the combined Nasdaq. The S&P 500 docked 3.1% in the week – the worst since September – and 6% from the maximums. Cross your fingers for the administration to learn some of the lesson. But, in any case, From the superb Trump Rally that motivated his triumph at the polls in November, there is nothing left. Everything ended up returning on Thursday. The Animal Spirits They threw the towel.
Hesitation in the neighborhood and advance with China
The commercial war began in February, and deepens, in another front that today does not awaken so much attention. Trump hesitates in the neighborhood, but advances firm with China. In February, he applied an extra 10%tariff. And last week, he added another 10%. Unlike Mexico and Canada, Chinese imports were already subject to an average tax of 13% (on Trump’s initiatives in their first mandate that President Biden maintained or in some cases reinforced, as in that of electric vehicles, which quadrupled the tax at 100% in May 2024). Beijing replied with his own rise in tariffs – 10 to 15 percentage points – in agricultural products, coal, trucks and certain sports cars. He also announced the beginning of an anti-monopoly investigation to Google. But the most annoying thing for Trump is that Tik Tok is reinforcement to the US capital landing to share his property. China informs, in public and in private, that it is ready for all kinds of war.
In campaign, Trump promised a 10%general tariff; and for China, 60%. It would be said that today is halfway. This week the new taxes and aluminum should be applied. On April 2, the reciprocal tariff scheme that points to leveling the bilateral commercial treatment, country by country would be defined. As can be seen, Trump does not give up in his crusade. He wants to increase the collection to extend the validity of the tax reduction that Congress granted to him in 2018, and that the deficit of public accounts is not overflowed. Some, those who go up, are taxes paid by foreigners, Trump Dixit (although it is not true). The others, those who are going to go down, are the ones who pay the residents. With people like that to the helm, what can go wrong? What should be clear is that the third rail that does not have to step on is that of trade with Mexico and Canada under the orbit of the USMCA. The regionally integrated automotive industry, by case, cannot work in a month, or three, or six, if barriers are now interposed. And Trump dreams of recovering those cross -border jobs. With time, with a renegotiation of the treaty, and low tariffs, it may be an inconvenient, but feasible operation. Will you understand? Or will you put your fingers again in the plug? The chances of a recession in the US also depend on the response. Today still, no matter what suggested the negative forecast of the Atlanta Fed or the abrupt jump in the betting markets. But if Trump is stubborn, he can get what he could not drill: a recession as God commands. And so he would achieve what no US president: two consecutive recessions, one in each mandate.
Source: Ambito
