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The most dangerous thing in definitions is its safety. What could be more clear than slapped 25 percent of the fees on all goods than Canada and Mexico? However, the impact of these commercial measures and their implementation is demonstrated in a demonic way. This may explain the silent market response.
Some stocks followed a predictive text on Monday after announcing the customs tariff. Car makers shares fell, for example. This is logical: their cars include parts that cross the border, in some cases several times, before reaching the agency. Stelantis is one of the companies that ships between the utilities on both sides of the United States and Canada.
Then there are companies that buy more intense goods than China and sell them to American consumers. This would include Best Buy, or the budget -outing dollar tree. They are now facing an unenviable decision between the amount of these increasing costs that must be swallowed up and the amount of transition to consumers – at the risk of incurring the president's anger. Donald Trump.
For American companies on a wider scale, more discomfort is awaiting. Trump's tariff has already pushed the strong dollar even up. This, in itself, is not a surprise. A study on the last Trump presidency He suggested that the definitions of China paid the dollarAnd I pushed down the Renminbi. Citigroup strategy believes that the latest definitions justify the bump of 3 percent.
This is for companies – from online search providers to coffee chains – which receives a large share of their revenues and profits in foreign currencies. It seems as if Trump has slapped a tariff for their external profits.
Technology, food and household commodities are the most affected, and strategic experts are calculated by Morgan Stanley; Communications and facilities are lower. Wall Street has also found that low -sensitive stocks of dollar profits have surpassed their peers since September.
All this heralds modification instead of the crisis. 1 percent decreased in the S&P 500 index by late morning-after Mexico received a period of one month-not up to 20 days trading last year. The worst is already priced, because Trump has not hidden his plans. BNP Paribas economists note that customs tariffs have already been established in basic economic expectations.
But it may be equal that investors do not know where to start. Supply chains differ even among companies that are close peers. The trade war, especially when the supply chains that are still recovering from a pandemic are still an unlimited area. One of the permanent features of the American exception is that investors flow to American assets in times of chaos, even when Uncle Sam is the cause of this chaos.
Either way, the market reaction – does not exceed ignorance – is in itself a danger. If the stock prices fell, he would have sent a message to the president that the definitions were not as clear as it appears. As the relative investors' failure gives it a great reason for showing restraint.
