UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Deals and delays'
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Nov 17, 2025 Dive into the recent Swiss-US trade deal, which brings more tariff cuts and questions about their impact on consumer prices. Explore the complex landscape where trade announcements often don't result in immediate changes. Discover slow tariff reductions in the EU and uncertain negotiations with China over rare earth exports. Paul also highlights Japan's GDP drop and upcoming fiscal support while emphasizing the importance of the Empire State manufacturing survey and the latest Italian inflation figures.
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Tariff Cuts May Not Lower Consumer Prices
- The Swiss-US trade deal will cut tariffs paid by US importers, following recent food tariff reductions.
- Paul Donovan notes it's unclear how much of those tariffs were passed to US consumers due to short-lived Swiss tariffs and importers' expectations.
Tariff Cuts Rarely Reverse Price Rises
- Cuts in effective tariff rates have not typically reversed prior consumer price increases.
- Donovan warns this matters most for food where consumers are highly price sensitive and inflation perceptions react strongly.
Deal Announcements Aren't Delivery
- Announcing a trade deal doesn't guarantee implementation or immediate benefits for markets.
- Donovan highlights slow EU follow-through and unresolved China-US rare earth talks as reasons for investor caution.