Tariff Ruling Met With a Yawn
Welcome to MktContext! I am a professional money manager, trader, and investor who has been timing and beating the market for over a decade. We specialize in predicting market direction by studying the economy and market signals. Join 12,000 subscribers at MktContext.com for our weekly deep dives and analysis!
The US Supreme Court struck down Trump’s tariffs, as widely expected would happen. However, no judgment was given on whether refunds are due. Trump responded by saying he would reinstate the tariffs under a different legal authority. He subsequently announced a new 10% global tariff lasting 150 days.
Over 1500 companies have already filed for refunds totaling $170B. However, we think there is little to no chance these refunds will be issued.
In contrast to the cataclysmic reaction to the April tariffs, market ignored the new 10% tariffs. Trump himself has repeatedly shown these to be empty threats. Markets rallied due to the removal of this uncertainty overhang, particularly tech and consumer companies which were the primary beneficiaries of cheaper imports.
Inflation markets were also muted. At this point, tariffs have not demonstrated a flow-through to higher inflation, and only a small impact on employment. In our view, peak tariff terror has passed. With this overhang out of the way, the rally setup looks much cleaner.
Continue reading at MktContext.com to see our trades and portfolio.
Join 12,000+ macro investors who get these insights before the mainstream media catches on!
