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.
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Tariff Threats and Market Reactions
- Trump acted fast on his tariff threats against Mexico, Canada, and China.
- Markets reacted with fear, showing they hadn't believed he'd follow through.
Differing Reactions from Canada and Mexico
- Mexico didn't initially retaliate against US tariff announcements, unlike Canada.
- Canadian politicians reacted strongly, encouraging citizens to boycott US goods.
Tariffs Before Confirmations
- Trump's trade representative and commerce secretary hadn't yet been confirmed when he imposed tariffs.
- This unusual move suggests he was either rushing or using tariffs as a negotiating tactic.