Market Musings 11/26/2024
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Markets largely shrugged off Trump’s tariff threats－yet they loom large as potential inflation risk.
Trump announced he would enact a 25% tariff on all products from Canada and Mexico as punishment for illegal immigration and the drug trade. In addition, China would receive the same treatment, but with a bonus 10%.
So what are #Tariffs?
You can think of tariffs as a tax imposed on imported goods. For example, a 25% tariff on a $20 chair would be a $5 tax.
However, unlike your taxes, tariffs are typically passed on to the consumer. So, that $20 book likely now costs you $25.
In his first presidency, Trump used tariffs in his trade wars with China and Europe. So, we can see tariffs likely to be a part of his second term as well.
While tariffs can protect important domestic industries as part of specific government policy, we believe broad use could be potential fuel for a trade war that could lead to more inflation. Obviously, a pick up in inflation could impact #RateCuts which could derail a #Goldilocks soft landing.
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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
Original Photo by Pixabay.