Tariffs on Canada, Mexico, and China: Market Impact

Key Highlights:

* Trump's tariffs on Canada (25%), Mexico (25%), and China (10%) have sparked uncertainty on Wall Street.
* Economists and strategists predict potential economic consequences, including inflation, growth slowdown, and trade disruptions.

Analyst Insights:

Morgan Stanley Public Policy Research Team:
* "Meaningful consequences" expected, including a potential recession in Mexico and lower US economic growth.
* Higher inflation (0.3-0.6%) and weaker equity markets anticipated.

EvercoreISI Economics Team:
* US growth likely to decline due to reduced exports, lower investment, and job losses.
* Inflation and growth projected to be dragged down by 40 basis points.

EvercoreISI China Strategist Neo Wang:
* Tariff timing seen as offensive to Chinese government and public during Chinese New Year holiday.
* Tariff aimed at gaining leverage in TikTok negotiations or forcing China to engage.

JP Morgan Metals & Mining Analyst Bill Peterson:
* Financial risks identified for companies with exposure to Canada and Mexico.
* Alcoa, GrafTech International, and Cleveland Cliffs seen as particularly vulnerable.

22V Research Strategist Michael Hirson:
* China expected to impose symbolic tariffs and engage in informal retaliation.
* US-China cooperation on fentanyl may be a potential area for easing tensions.
* US-China trade deal remains possible, despite Trump's fondness for tariffs.

Yahoo Finance's Brian Sozzi:
* Political barriers seen as high for a US-China trade deal, especially in the early stages of Trump's second term.