The Quant / Financial Engineering Podcast
The Trump Tariffs (part 2)
Feb 11, 2025
Professor Salas, a Lehigh University professor and tariff expert, dives into the notable impacts of the Trump tariffs on trade relations. He discusses the legal justifications surrounding recent tariff changes, focusing on China while addressing market reactions from Canada and Mexico. The conversation highlights the shifts from NAFTA to the USMCA, and the broader economic implications, including potential GDP effects and inflation concerns. Salas also explores how U.S. foreign policy decisions are reshaping alliances and affecting global trade dynamics.
35:30
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Quick takeaways
- The removal of the de minimis exemption for small-value imports from China has significant implications for companies like Temu and impacts consumer pricing strategies.
- Recent tariff policies could potentially destabilize long-term international relationships, as nations may realign their alliances in response to U.S. actions.
Deep dives
Impact of Tariffs on North America
The discussion highlights the significant impact of tariffs on trade relationships between the U.S., Mexico, and Canada. Initially, President Trump proposed 25% tariffs on both countries, citing issues like fentanyl trafficking and immigration as national emergencies to justify this action. Although there was initial market panic leading to a decline in stock prices, after negotiations with Mexico and Canada, Trump rescinded the tariffs, resulting in a market rebound. This situation underscores the uncertainty in trade policies and the potential for future tariffs as negotiations continue over the next month.
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