It will be interesting to see where the actual tariffs end up in the US. Many believe that the reason for the strong rally in the US markets this week is because Trump is going to have to “walk-back” virtually all the tariffs. All the talks of “deals” will allow him to point to victories.

 

In the case of Canada (the US’s largest trade partner), now that there is a Prime Minister, the negotiations will begin. A clear path and resolution will be helpful for the businesses on both sides of the border, and undoubtedly the markets.

 

With the exception of the two countries bordering the US, many countries have been “pulled” towards China. I found this graph insightful:

 

Many significant powers already do more of their trade with China than with the U.S.: these include Australia, Brazil, India, Indonesia, Japan, and South Korea.

 

China is also a source of essential imports, many of which cannot be easily replaced. What “victories” are achieved are to be determined. But the market seems to believe that more tariff concessions are coming.

 

This weekend is the running of the Kentucky Derby: on my bucket-list of events to attend in full jacket and dress. I will no doubt have to wait for a normalization with the US, before heading down to a Kentucky Derby, drink Mint Julips, nattily dressed in a derby hat and bow-tie complementing a colorful suit…I’ve got it on good sources that the exotic sounding Luxor Cade will be the winner.

 

Have a great weekend!