Financial markets are in a high-volatility moment, triggered by the Trump administration’s attempts to use tariffs to re-order America’s global trading relationships. By far the most unexpected early move has been the announcement of 25% tariffs on Canada and Mexico, slated to go into permanent effect on April 2. Markets don’t like the seeming randomness of these trade wars, selling off U.S. equities into correction territory. But the moves aren’t random. The administration is pursuing policies that produce short-term volatility in a gambit to end an unsustainable status quo. What may look like unnecessary trade wars are part of a rebalancing effort that, if it works, will justify the pain.
Read Full Article »
