Global stocks lifted after news Trump may soften stance on tariffs for Mexico and Canada

by | 8 Mar, 2018

President Trump listening to James Mattis speaking alongside Republican colleagues. Credit: Whitehouse.gov

U.S. President Donald Trump may offer Canada and Mexico a 30-day exemption from tariffs on aluminium and steel imports which could be extended based on the amount of progress in NAFTA talks, according to the White House Press Secretary Sarah Sanders.

Hints that Trump was set to reconsider the range of the policy came yesterday after the Secretary of Energy Rick Perry said he wasn’t sure whether Trump had made his mind up over the issue.

Republican colleagues including Speaker of the House Paul Ryan have been trying to get the President to follow a more targeted policy with an emphasis on hitting China on trade instead of allies, including Canada and Mexico. Yet Trump initially seemed unwilling to waiver, saying: “No, we’re not backing down. We’ve had a very bad deal with Mexico, a very bad deal with Canada. It’s called NAFTA. Our factories have left our country. Our jobs have left our country. For many years, NAFTA has been a disaster.”

Indeed, the tariff move is where the rubber hits the road for Trump – will his Republican colleagues rally around his ‘America First’ agenda, which is centred on reviving long-suffering American manufacturing? Or will they instead remain entrenched in a globalist perspective, which accepts the decline of American industry in favour of shipping jobs overseas and maintaining the status quo of global trade, as has happened for the last few decades under previous Democrat and Republican governments?

Whatever the case may be, it is highly unlikely they will be able to sway the President on his long term objectives given the roaring success these policy ideas were on the campaign trail in 2016. Trump won’t sell out his base just to score political points in the Capitol.

However, the notion of a softened stance on steel and aluminium tariffs helped Asian stock markets to rally today – the KOSPI rose 1.30 percent, the FTSE Hong Kong by 1.76 percent, the NIFTY50 by 0.46 percent and the ASX200 by 0.69 percent. European markets opened a little higher too with the CAC40 leading the charge.

Tariffs might not be the only thing the markets have to worry about though, especially if the U.S. starts pushing to clamp down on Chinese intellectual property theft too. Tensions may become inflamed.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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