Wall Street Breakfast U.S. and Mexico quickly reach tariff delay deal
Feb 3, 2025
A last-minute deal delays U.S. tariffs on Mexico by a month following talks between the presidents. This unexpected move stirs up reactions in the stock and currency markets, leading to noticeable swings. Additionally, the discussion touches on Trump's tariff policies and their potential impact on the economy, including Mexico's security commitments. The implications for market sentiment are explored, highlighting how quickly political decisions can ripple through financial landscapes.
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Tariff Delay Impact
- US tariffs on Mexico were delayed for one month after a presidential call.
- This led to stock market gains and a reversal of the dollar's rise against the peso and loonie.
Tariff Impact on Economy
- Goldman Sachs strategist David Kostin linked tariff increases to S&P 500 earnings reductions.
- He estimated a 25% tariff on Canada and Mexico could increase US core prices and hit GDP.
Future Tariffs
- Despite the Mexico delay, Trump stated that tariffs on the EU are inevitable.
- He suggested a deal with the UK might be possible.