Yesterday I went through the market falls, as China retaliated to the Trump tariffs, even as President Donald Trump ploughed ahead with plans to impose steep new tariffs on imports despite warnings that the policy could trigger economic chaos.
Yet only 13 hours after the duties had gone into effect, in a social media post, Trump said that a set of tariffs on imports from many of America’s largest trading partners were paused. He indicated that turmoil in the financial markets following the implementation of the tariffs played a role in his decision.
In particular Bond yields had climbed, with speculation this might be a signal China was selling some of their massive holding, or perhaps it was hedge funds needing to raise cash to meet margin calls in a falling market, or maybe it related to elevated inflation fears. But it does appear the ructions on the Bond Markets cash a shadow on the tariff show.
Just remember this is a 90-day pause, and 10% tariffs are still in play, with some suggesting that these will remain a baseline for any negotiations, while others are seeking zero tariffs. This has a long way to go, and markets will likely remain jittery, so expect more icebergs ahead.
