Liberation aftermath

Liberation day arrived yesterday at 4 pm from the Rose garden. Armed with panels, like tablets with the Ten Commandments, President Trump presented the tariffs (see chart below) he is going to impose on all goods from countries that trade with the U.S. next to the tariffs those countries apply to the US. What’s interesting is what’s not going to be tariffed: steel, aluminum, gold bullion, semiconductors, pharmaceuticals, lumber, energy and minerals not available in the US, among other items. It’s unlikely we’ll see tariffs on TSMC chips, or Israeli pharmaceutical products, or perhaps, Ozempic. Also interesting to know is how many phone calls are already taking place between members of the Trump administration and some of those countries to avoid those tariffs. Initial reaction: futures down aggressively in the US and Japan. U.S. treasury bond yields are sinking, perhaps intentionally to allow Secretary Bessent to extend durations on treasury bonds, although he might wait until more pain is applied on the equity markets to be able to reshape our yield curve more aggressively.

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