Trump Tariffs Impact on Wall Street: An Analysis
Key Market Reactions:
* NVDA: -3.67%
* CLF: -2.38%
* MSFT: +0.02%
* EAF: +3.45%
* AA: -0.59%
Trump's Tariffs and Economic Impact:
* President Trump has imposed tariffs of 25% on Canada and Mexico, and 10% on China, citing concerns over fentanyl and illegal immigration.
* Morgan Stanley economists predict a potential recession in Mexico, higher US inflation (0.3-0.6%), and lower US growth (-0.7% to -1.1%) due to the tariffs.
* EvercoreISI economists estimate a 40 basis point increase in inflation and growth drag in the latter half of the year.
Industry Insights:
Metals & Mining:
* JPMorgan Metals & Mining Analyst Bill Peterson highlights risks to Alcoa (AA), GrafTech International (EAF), and Cleveland Cliffs (CLF) due to their exposure to Canada and Mexico.
* Peterson suggests that GrafTech may restart its US-based facility if graphite electrode pricing remains high.
Technology:
* EvercoreISI China Strategist Neo Wang believes Trump's tariff announcement during Chinese New Year was offensive and could potentially lead to negotiations or pressure on Beijing to initiate talks.
US-China Trade Relations:
* 22V Research Strategist Michael Hirson expects China to respond symbolically and continue exploring a broader deal with Trump.
* Beijing may address US concerns over fentanyl by cracking down on exports to Mexico.
* Hirson believes Trump will likely impose additional tariffs on China despite the possibility of a trade deal.