Economic Reactions to Trump’s Policy Announcements

LONDON/NEW YORK (Reuters) – The dollar extended its slide while crude prices curtailed their losses after U.S. President Donald Trump said on Monday he would tariff and tax countries to enrich Americans, overhaul the trade system, and declare a national energy emergency.

Comments from Financial Experts

Rick Meckler, Partner, Cherry Lane Investments, New Vernon, New Jersey

• On Tariffs Delay: The biggest reaction is what appears to be the delay on the tariffs. Of the proposals, this was most likely to affect the market dramatically due to its inflationary potential and the possibility of retribution.
• Market Encouragement: Saying he will study and negotiate after proposing immediate action is encouraging for the market.
• Aspirational Proposals: The initial proposals from the Trump team may be aspirational and implemented slowly, as the new team just started.

Matt Gertken, Chief Geopolitical Strategist, BCA Research

• Expectations on Tariffs: Significant tariffs are expected early in his administration, potentially in the coming weeks, leveraging a strong U.S. labor market.
• Declining Pressure Ability: Later, the ability to maintain trade pressure will decline, risking lost opportunities to reshape U.S. trade relationships.

Eugene Epstein, Head of Trading and Structured Products, Moneycorp

• Tariffs as a Negotiation Tool: Many are surprised by the continuation of familiar strategies from Trump, using tariffs as a negotiating tool.
• Dollar Strength: Though the dollar weakened slightly, it still has shown substantial strength, indicating that current actions may redefine the long-term tariff policy landscape.

Zachary Griffiths, Senior Investment Grade Strategist, CreditSights

• Market Reaction: The rally in the dollar and equity futures was based on expectations that Trump would not impose direct tariffs immediately.
• Skeptical Outlook: Not imposing tariffs today may prove temporary; a gradual implementation of large tariffs could challenge inflation and lead to tighter monetary policy.

Jamie Cox, Managing Partner, Harris Financial Group

• Energy Prices: Energy prices are expected to drop significantly, benefiting consumers and improving inflation data in months ahead.

Nigel Green, CEO, Devere Group

• Energy Sector Benefits: The energy sector will be a key beneficiary of policy changes, with potential increases in output and profitability for U.S. energy firms.

Gabriela Siller Pagaza, Director for Economic Analysis, Grupo Financiero Base

• Mexican Peso Reaction: The exchange rate of the Mexican peso appreciated slightly after Trump’s speech due to no tariff announcements.

Marc Chandler, Chief Market Strategist, Bannockburn Global Forex

• Relief Rally: There is a relief rally in foreign currencies following no explicit tariff announcements.
• Realistic Tariff Expectations: The expectation that $2 trillion can be raised through tariffs is seen as exaggerated given U.S. import levels.

Note: This summary focuses on market reactions and expectations following Trump’s policy speech regarding tariffs and trade.