On the day of the American presidential inauguration, a general chief of American technology told me that although he was likely to be struck by reprisal prices, he assumed that any trade war was going out.
“Trump lives according to the reaction of Dow Jones,” he said-something that the markets call the “Trump put”.
This means that each time an announcement of the White House that the damaged feeling was coming out, the president would ease after seeing a scholarship drop.
These hypotheses have now changed, after the president gave a television interview in which he minimized the amount he was moved by the markets.
And only one day after the US stock markets fell greatly concerns about the impact of Trump’s policies, the president decided to double the prices against Canada on steel and aluminum, in response to higher accusations for Canadian electricity, worth around $ 100 per invoice, in New York, Minnesota and Michigan.
On Monday, Ontario Prime Minister Doug Ford announced an additional 25% on electricity linked to the United States and threatened to “close” the food completely.
President Trump said that he reconstructs wealth depending on the decades or even a century in the future, and this cannot be measured in the quarterly results of American stock markets.
In addition to the comments of its Treasury Secretary Scott Bessent, the White House communicated to the markets that the president now has a certain tolerance for the short -term market and economic pain. This has changed the calculation.
There are two other factors at stake here. There is evidence of a real potential reversal in American economic feeling, raising questions about a recession.
The latest real -time analysis of the Atlanta branch of the American federal reserve predicts a drop in the American economy in the first three months of the year.
Government cuts could also contribute to such reading, but the feeling of the private sector has also taken a hit, especially by the Cokey Hokey on prices.
Above all, uncertainty threatens to paralyze. Politicians change day by day, and even then, can take a break retrospectively.
The main departments of the United States government are not entirely clear about the direction of travel to the White House.
In addition to all this, in the case of Canada, a likely election suggests little incentive to make compromises.
Indeed, what is there to make compromises when Trump says that he wants to use an economic lever effect to make his neighbor of the North his “51st state”?
The travel management here is that the trade war increases in intensity and range.
New trade barriers on the European Union can emerge in three weeks depending on “reciprocity”.
While other nations see signs of inflation re-emerging in the United States, they will be more likely to try to add to it, to bring consumers home to the consequences of their government’s decisions.
During the past fortnight, the world learned that President Trump is serious about the prices, even on his allies. They were enormously applied.
The main business partners have reciprocated in kind and have an incentive to increase the bet. And the White House now wants to communicate that it has a high pain threshold for economic and short -term market disturbances.
All the roads lead to April 2 and the announcement on the “reciprocal prices”, and for the moment these tensions do not seem to go towards a truce, a cease-fire or a break.
