What impact could Trumps tariffs have on share prices … ?
Any thoughts people ?
I’m not an expert, but from what I can see, traders are on a rollercoaster. I think it will take a few months to see where we are heading.
Trump rules by executive orders, a powerful but short-term/short-lived instrument. There’s not guarantee that those decisions will bring any longer term changes, except high legal costs as it’s not even clear if they are all legit, and suing is American national sport . The market will react to most of those decisions, with many up- and down-trends, probably with some significant short term dips as well.
With regards to tariffs specifically, somebody will have to explain who is going to pay for them. I suspect the extra costs will be pushed down to the customers (as usual), in one word INFLATION. And inflation tends to be sticky and highly contagious, moving quickly from sector to sector, and across borders.
of course to cost are passed to the US consumers, tariffs are paid by the importer, not the country the products are coming from. these costs will have to be passed on to the customers, first shops and wholesalers, they will pass on the their customers.
as he has already put on hold tariffs on mexico and canada, they could have just been a smoke screen for the tariffs on china, so it doesnt look like he is singling china out.
what ever happens it looks like he is using them as a weapon against any country he wants something from. so expect alot more threats of tariffs, with is bound to cause market jitters
Yes, you are right that consumers would pay. However, it is much more nuanced than that.
Obviously with Trump it is all about negotiation. Negotiation is what he has done for most of his life and remember that he is a brash New Yorker.
However, Trump’s plan appears to be to only put tariffs on goods that are (or could be) made in USA. I am sure that he does not intend to put tariffs on goods that, for whatever reason, cannot be made in USA, at least without some other compensation.
I seem to remember that this week TSM has stated that they will build a chip plant in USA. Similarly there is a Japanese owner who is also investing in USA. These are the sort of incentives that Trump is aiming for.