Trump Dials Back Most Tariffs but Targets China

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Now the most tariffs are in hold. Investors are breathing a sigh of relief. But a new American trade rule is still here, with a wide 10% duties on imported goods, higher for cars and major metals. And most importantly, the trade war with China is increasing.

President Trump, despite the avvowels from some of his advisors, has withdrawn from his plan to carry high tariff levels on the basis of country and country, that they were not for dialogue. Financial markets may have upheaval, especially the bond market, may be provoked to think again. Instead, he says that personal rates are delayed by 90 days, while the US looks for trade deals with individual countries.

A great exception: Tariffs on China are growing up to 145%, even higher than Trump. Beijing returned to Washington with its own, high rates, so Trump is out to exclude China as a special case.

Among the chaos, here are our takeaways:

• 90-day stoppage can be permanent When it comes to high, country-specific duties. Trump was playing hardball, threatening high rates as 50%, to motivate business partners to higher than low rates on American goods. He wanted him to take other steps to buy more American goods, to build factories in the US or to narrow the business surplus with us several runs. But it can be very difficult to achieve those concessions, and in the meantime, the financial markets were nervous about potential losses to the economy. Trump trusted, it seems, selecting 10% flat rate and time to get business partners to curb duties on American goods.
• Trump is likely to get some concessions He can tout in the coming months. But he would probably settle for “buy us” promises.
• When it comes to China, there is little sign of any harmony. Beijing cannot be seen to deposit Trump, even if the sky-high American tariffs have made it expensive. We can enter a business Cold War, characterized by two rival superpowers, and small countries have to choose whether to align with the US or China.
• Trade with Canada and Mexico – two major business partners – are in the air. The earlier 25% of Trump’s duties are for the objects that do not follow the free-trade treaty of three countries, for the Renaissance next year.
• On the economic front, we see Gross domestic product Development slow and inflation Growing up As a result of 10% of blanket tariffs, GDP with high duties on cars, metals, etc. will eliminate a small profit, while inflation can be 4% hits. It keeps the Federal Reserve in a bond, forcing it to choose whether to cut rates to promote growth but fan inflation. We suspect that Fed will stand Pat in his May meeting, but later the rates will be cut in the year.
• On stock: Continuous instability than expected. Do not panic, but caution is now necessary