The market did side with Trump before, but that could change and the market could challenge him for the first time as unknowns will disrupt the market.
According to CCTV News, on February 1, local time, President Trump signed a tariff order on the same day, imposing an additional tariff of 25 on imports from Canada and Mexico, and a tariff of 10 on energy resources from Canada. An additional tariff of 10 on imports from China.
U.S. imports of goods from China, Canada and Mexico account for almost half of U.S. trade in goods, a move that could disrupt more than $2.1 trillion in trade.
1 The news occurred around 6:00 a.m. Beijing time, close to the time of past tariff news. Anytime around 5:00 7:00 AM GMT in the future is the time to watch for.
2 Usually tariffs require congressional approval, but this time Trump invoked IEEPA, citing an economic emergency, and went straight to implementation.
3 A retaliation clause has been added, claiming that the tariffs will also go up if there is retaliation against them.
Canadian Prime Minister Justin Trudeau had previously stated that any tariffs would trigger an immediate and robust response and that all options were on the table.
Canada exports 75 percent of its goods and services to the U.S., which means the tariffs would hit it hard. Some analysts have suggested that a tariff rate of 25 would push Canada and Mexico into recession.
4 Rather than targeting a particular industry, as had been analyzed, the tariffs are universal and the market will be shocked by the new tariffs with no exceptions for goods. However, the move to apply a tariff rate of 10 to Canadian natural gas, oil and electricity instead of 25 seems to have taken into account the impact on U.S. inflation. According to data from last October, a month before the election, the U.S. was importing nearly 4.6 million barrels of oil a day from Canada and 563,000 barrels of oil from Mexico. U.S. oil production averaged nearly 13.5 million barrels per day during the same period.
5 The tariffs are tentatively scheduled to take effect on February 4 next Tuesday, not immediately as White House spokesman Levitt said the day before, the effective date was delayed by two days, it is not clear for what reason. It could be an attempt to mislead the market into believing there is a turnaround until the last minute in order to create more room for negotiation. Most of the risks to the market will be focused on Monday to release, fortunately the Chinese market is still in holiday mode on that day, but the offshore yuan trend is worth watching.
6 No specific benchmarks were provided for the elimination of the new tariffs.
Trump is making a major political bet that his actions will not exacerbate inflation and trigger financial aftershocks that could damage the global economy.
We published Global Markets Strategy China Returns, Big Showdown , China’s return to the poker table coincides with a historical turnaround that has dramatically changed the logic of trading in global markets. Is the bull market in US stocks over? Where will gold top out, and what’s the next big move for A-shares and the dollar? Here are the answers.
Report Highlights
1 Today Released Fear and Greed Index Report Change, Huge Change , The week that China left the market, global market risk appetite changed dramatically. Important signals emerged in markets such as the U.S. dollar, U.S. stock market, A-shares, Chinese treasury bonds, Guizhou Maotai, gold, silver, the euro, bitcoin, crude oil and more.
2 Three major changes in the narrative theme of the current market
First, the Federal Reserve reversed the traditional rate cuts and took the initiative to create uncertainty. We exclusively decode the Fed’s next move in three sets of scripted game theory.
Second, with the tariff announcement, market sentiment has changed dramatically. We unveil a little-known piece of economic data that will be Trump’s tariff thermometer.
Third, DeepSeek turns the game on its head as we look at the future of financial markets from the perspective of Wall Street.
In interpreting these three major changes, we have refined three words and made them bold and red, and if you understand these three words, you will understand the future direction of the Chinese and American markets.
3 We formulated the February gold and crude oil strategy, through accurate data analysis and modeling calculations, to find out the appropriate bottoming and shorting points.
4 What will happen to the Chinese stock market after the holiday? Will the next step be an upward push to 3,500 points or a dip to 3,000 points? We tell you the answer.
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