Last weekend Donald Trump announced 25% tariffs for Canada and Mexico and 10% extra for China. He turned back (partially) on Monday, before the measures went into force on Tuesday. Trump, who is a born negotiator, goes and returns as if nothing.
With Donald Trump You never know. “The most silly trade war is coming,” titled the Wall Street Journal. The president anticipated it with bombs and dishes. They go 25% tariffs for Canada and Mexico and 10% extra for China. This was announced on Saturday afternoon. It turned back (partially) on Monday, before the measures went into force on Tuesday. A Trump victory, Trump said. It was a communication blitzkrieg. In addition to a way of advancing against China – the taxes to the American partners were suspended for 30 days – without causing a durable stir. Beijing retaliates (very calculated). But, Trump, unlike his reaction against Petro’s Colombia, did not climb the confrontation. I will talk to Xi Jinpinghe pointed out. And at the same time he created a background of sovereign wealth (the State enlarges before shrinking), which, among other things, could participate in the purchase of Tik Tok. The president looks more in a hurry to forge an agreement with XI, for the US to share the property of the successful Chinese company, than to shoot the heavy commercial artillery. A blow to the table, you have to understand, it is also a way to progress a conversation.
Mambrú went to war and never returned. Trump, who is a born negotiator, goes and returns as if nothing. If the week began in the red red ended in an oasis of peace and skillfully urged by the Japanese premier, Shigeru ishiba. The novel prime minister took him to home an authentic and resounding victory- a proposal “Win-Win”- that Trump could not reject. Japan will double its defense expense by 2027 (increasing the acquisition of supplies in the US). And will increase the purchases of liquefied natural gas (to replace the one that supplied Russia). Both leaders agreed to level the Washington commercial deficit, which could be achieved quickly by the route of greater gas and oil shipments. Toyota and Isuzu will build new plants in the US facilitating reindustrialization plans, which are the Republican’s dream. And Nippon Steel (no Nissan as Trump said), who wishes to keep Us Steel (operation blocked by former President Biden), would accept to injject capital into the company. All this without Trump having poured a single threat before. Hopefully in Europe they pay tokio’s attention. But not. And hence the promise of initiating another war, one in which “the reciprocity of tariffs” will be applied, which points unmistably to the old continent, among many others (such as Vietnam, India and Brazil). Of course, with Great Britain and the Labor Leader Keir Starmerrelationships are well rummed. This is not an ideological crusade.
There is a tenacious war that Trump did not cause and wants to end as soon as possible. The treasure bond market began hostilities in mid -September when (the secretary of the Treasury, Scott Besent Dixit) The Fed surprised with its first cutting -down, half a point. It is true that the then republican candidate began to lead the presidential race with his inflamed economic discourse. The “vigilantes” left a double irritation. They did not like the lightness of Powell’s Fed- with the background of a very robust economy- or the projections of a stratospheric fiscal deficit. And it did not matter that the short rates sank 100 base points, the long rates came to climb 120. And they still retain 9 9 advance base points. It happens that the Fed warned that it is removed to winter barracks, December inflation was moderated, and the bonds calmed down on the margin. But on Wednesday, Besent went further. “Trump and I are focused on 10 -year -old rates,” said the secretary. In Davos, Trump asked that the rates fall, two days after assuming. “I was not referring to the Fed,” Besent said, but to the long rates, which the market sets. Indeed, the president did not complain about the decision of the Central Bank to keep the fees without changes after his last meeting (a classic cantinela during his first term). “It is not surprised, he said,” at this time it is the right decision. “
What happened to Trump that forgives one of his favorite targets? What have you been so changed? Besent and his team, basic finance lessons. And the president learned. He no longer demands anything from the Fed. It is the other way around, he is willing to offer him solutions with his economic policy. “If we deregulate, if we get our tax proposal to pass, if we lower the cost of energy, the inflation will lower and the rates will be lowered and the dollar will also be accommodated,” Besent said. What to say yes Elon Musk Light the chainsaw. Of the tariffs he did not say much, but to a good understanding … it would not be very consistent to undertake a commercial war that was inflationary.
Welcome to the club, said James Carville, Bill Clinton’s electoral strategist. He did a similar job in 1992. He had to convince the then brand new winner at the polls that he was not convenient to fight the bonds. That he had to file the infrastructure plan that put his hair, disciplinary the fiscal front, and thus have them on his side. The loss of long rates would work as a powerful tail wind. After all, what counts “is the economy, stupid.” No sooner said than done.
Nose obvious, the bonds celebrated Besent’s white flag. And the rate of ten years revealed him playing his lowest level since mid -December. They didn’t expect anything else from a seasoned trader, but they doubted their boss. Wall Street is clear that Trump has been the most pro-base president in history. And now you can presume that it is also “pro-fone.” But the administration must do more. It is urgent to reassure common people. Consumer confidence on Friday sank to a 7 -year -old floor because of a spectacular jump of inflation expectations one year. They rose a percentage point to 4.3% in December, before the transfer of command and, of course, of the uproar that produced last week the zamarre of the tariffs. That the price of the vegetable is not expected because of the price of the vegetables, and the biden error that was paid at the polls is repeated, it should be the war cry. You have to iron inflation expectations if you want long rates to fall and, what was not said, that the Fed is coupled later.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
