UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'The retreat paradox'
Jul 11, 2025
The podcast dives into a proposed 35% tax on Canadian products, unpacking its complexities and unclear applicability. It highlights market reactions amid rising equities and discusses the unpredictable UK GDP data affecting investor confidence. Political ramifications add another layer of intrigue, with discussions on trade implications from the U.S. administration. Adding a quirky twist, the fate of penguins on Heard and McDonald Islands is humorously noted as potential future tax targets.
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Paradox of US-Canada Tax Hike
- US imposed a 35% tax on Canadian products despite Canadian digital tax concessions.
- The ambiguity and potential market reactions create a paradox regarding the trade war's future.
Market Rally vs Trump Retraction
- Markets rise expecting Trump will retreat from tariffs, but market gains reduce pressure to retreat.
- This creates uncertainty over the actual path of US trade policy in coming weeks.
UK GDP Data's Political Use
- UK GDP data is noisy and mainly serves political arguments instead of economic clarity.
- Upward revision of March data strengthens recent growth picture despite May's decline.