Tariff Threats – Again
I’m amazed at how the market isn’t reacting to the tariff threats President Trump is making since he has already implemented some small ones. At a campaign rally in West Virginia, President Trump repeated his threats to tax European cars.
He said, “We’re going to put a 25 percent tax on every car that comes into the United States from the European Union”. That would be terrible for the consumer which is already not liking the buying situation in autos.
Commerce Secretary Wilbur Ross stated in an article in the Wall Street Journal that the report on auto tariffs, which was expected to be released in August, was postponed.
He also didn’t set a new timeline because of ongoing trade negotiations with Mexico, Canada, and the E.U. This isn’t the first time everyone at the White House isn’t singing the same tune.
Another point Ross made was that the materials the automakers sent the government are taking longer than expected to review. Unsurprisingly, the auto companies are against the tariffs because they will increase costs for the consumer which will lower their sales.
President Trump has threatened a 20% and a 25% tariff in the past. The Commerce Department has been analyzing the effects of potential auto tariffs. The President asked it to review if auto imports are a threat to national security in May.
It’s an extravagant claim to say cars sold from allies hurt national security, but it can be used as justification since it was used as an argument to impose tariffs on aluminum and steel earlier in the year.
Tariff Threats and Record Highs Hit, But Record Close Elusive
The S&P 500 was up 0.21% and finally hit its record high on Tuesday. However, it still hasn’t hit its record closing high. It tied the record for the longest bull market ever. It should continue this record run as earnings look strong. However, there are a few negative catalysts lurking which I will discuss in this article.
