What to Make of This Week’s Inflation Reports Amid Ongoing Tariff News…
President Trump made headlines again with a new round of tariff measures. The President signed a plan for “reciprocal” tariffs against a host of allied countries, but they will not go into effect immediately.
Instead, a study of trade practices will commence on a one-by-one basis before negotiations take place. As the memo states, “The Plan shall ensure comprehensive fairness and balance across the international trading system.”
In other words, Trump is threatening reciprocal tariffs on Europe and other countries right now. But if they cut their tariffs to U.S. levels, then there’s no tariff. If they insist on taxing American goods at a higher rate than we tax theirs, well, guess what’s going to happen?
We’re going to raise our tariffs to their levels.
Now, this comes after the president announced new 25% tariffs on steel and aluminum earlier this week as well as 10% tariffs on China last week over issues of illegal drugs and migration. (We covered this in a previous Market 360 here.)
But as I have said all along, what people need to understand is that this is how Trump operates. He wants to make you uncomfortable, negotiate from a position of strength and win.
Still, I understand that these tariff threats have continued to attract their fair share of attention this week.
In fact, our friends at FactSet recently conducted a search and found that 146 companies mentioned tariffs in their earnings calls from December 15 to February 6. This marks the highest number of S&P 500 companies citing “tariff” or “tariffs” on quarterly earnings calls since the second quarter in 2019.
