Only 1 US trade deal confirmed in 75-days. Will the can be kicked down the road again or will carnage ensue markets once more..
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| Trump tariff headwinds are building, as investors now fully expect the Iran-Israel war to be over.
EU exports are to be tariffed by by 50% in 2-weeks, up from an asymmetrical 10% current deal. The latest news from EU's industry chief Stephane Sejourne, suggests talks are still ongoing in re-balancing some key sectors with the US.
The question now is; will more time be offered if the other party (not US) is showing good faith or will the suggested tariffs come into place?
No real progress is being reported with India, Japan & South Korea with China expected to be a more drawn out process. This leaves just the UK being confirmed, but even that hasn't actually been signed yet.
So what does this mean?
If tariffs were to be put in place in 2-weeks time, probably chaos, similar to what we saw in February and March. The USD will lose value (likely 2%+) as it has done ever since Trump announced tariffs.
If the EU doesn't sign, this could be particularly painful for the Euro. I wouldn't be able to suggest just how bad, nor have I found someone willing to offer a forecast. I believe a deal will be done and I guess so do others.
The UK will be impacted by global trade, even though the UK-US deal is done and this will hamper the Pound, maybe not as much initially, but eventually.
I expect the can or cans to be kicked and consolidation on the market for the next 2-weeks, barring any surprise event/s of course.. |
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