Analysts are sad as tariffs take effect and reprisals are promised

Analysts from seekingalpha.com are all frowns as President Donald Trump's 25 per cent tariffs on imports from Canada and Mexico have go into effect today, while duties on Chinese goods have been doubled to 20 per cent. Trade war concerns have already hit business and consumer confidence, and a key GDP forecast signaled that the economy is shrinking at a faster pace than previously thought.
Seeking Alpha notes that China said it will impose additional 10-15 per cent tariffs on certain U.S. imports next week and expanded export controls on U.S. companies. Canada is responding with immediate 25 per cent tariffs on U.S. imports worth more than $20B, and will expand the duties to imports worth over $86B if Trump's tariffs remain for 21 days. Mexico is also expected to retaliate, with an announcement likely later today.

Reciprocal tariffs: Trump also declared that his proposed reciprocal tariffs will go into effect next month. These tariffs will be decided on a country-specific basis, depending on the duties imposed by other countries - "a tariff for a tariff, same exact amount," Trump said previously. Tariffs on "external" agricultural products will also begin in April, although it's unclear what the rate would be. Trump has also set sights on lumber imports, while stocks most sensitive to tariff shocks are being sold off.

SA commentary: "Economic indicators show a sharp deterioration, with significant drops in GDP and consumer spending, indicating increased odds of a recession," SA analyst Jeremy Blum noted, recommending that investors reduce exposure to economically vulnerable sectors. But Investing Group Leader Victor Dergunov views the current market fear as a potential buying opportunity. "Job losses, potential inflation, and other growth fears can be offset by Fed easing, continued AI growth, tax cuts, deregulation, fiscal stimulus, and other constructive economic event

Article Source: seekingalpha.com

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