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...Don Luskin of Trend Macrolytics wrote to clients about Mr. Trump’s plan for new tariffs—essentially taxes on steel and aluminum consumers: "Trump’s economic record has been excellent, and we draw assurance from that. But the very fact that this is his first big mistake requires markets to let him know he’s making it – which is one reason we think this has to prolong the present stock market correction. Considering that Trump has bragged so often about the rising stock market, presumably he would listen when it sends him a message."
Let’s hope so. Mr. Trump’s tweets this week suggesting it’s all just part of a NAFTA renegotiation may have some investors feeling less concerned, and perhaps that’s reflected in a more cheerful market as of this writing. This column thinks Mr. Trump is playing with fire. But on Friday Mr. Luskin suggested that the anti-growth tariff plan might be watered down a bit and expressed the hope that we are simply witnessing “the classic ‘big ask’ gambit in the art of the deal, designed to wring concessions out of counterparties. The negotiations will overlap with the ongoing NAFTA wrangling, as Canada and Mexico are the number one and number three exporters of steel to the US, respectively.”