They’re certainly working so far, driving major indices below their 200-day moving averages.
ES reached our 200-day target with ease, followed by an obligatory bounce which failed overnight.
If the tariffs result in a reduction in duties charged by our trading partners, that’s all well and good. The markets wouldn’t bat an eye. Unfortunately, the economic arguments the White House is putting forward are rubbish.
There is no chance of tariffs lowering prices, increasing US jobs or increasing profits. Consider Apple’s recent announcement of a $500 billion investment in the US. Estimates suggest that manufacturing jobs in China pay $5-6 per hour on average.
In the US, similar manufacturing jobs pay about $27 per hour. And, consider that US employees get healthcare, retirement, overtime and other benefits which are practically nonexistent in China. Other Asian countries pay less – often much less.
Obviously, if those jobs were to come back to the US, prices would definitely rise.
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