After 48 hours since the initial order in tariff was signed, there has been de-escalation and escalation simultaneously. Given that IEPA ( International Emergency Powers Act) was used to protect the nation from illegal immigrants and drugs, the actual intent of this action is still unclear.
In the past 24 hours, President Trump had conversations with Mexico and Canada's counterparts, which resulted in a pause on the respective tariffs for a month. But within this time the order of tariff on China did not get as much focus as it should have.
The result of this had led to the timeline pass and the 10% tariff hike to be implemented. This resulted in retaliation from China which announced an export curb on critical minerals and a 10-15% tariff hike on certain imports from the USA.
The big concern is these commodities include energy products such as oil, gas and coal. China being a large buyer of US energy products this would impact the businesses involved. The knee-jerk reaction from the markets was a given after such an escalation. Oil fell 0.5% and natural gas fell by 2% within minutes of the announcement.
The next 24 hours become even more crucial as this escalation between the USA and China needs to halt and reverse as it impacts the world. Given the recent tech moment from DeepSeek and now trade moment due to tariffs within the first two weeks of the new administration, it is a risk that the real world and financial are not fully factoring in. This would lead to higher volatility if not contained promptly.
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