As Trump Ups China Tariffs, Which Countries Are on His Non-Retaliating List?

The market is rebounding sharply following words from President Trump about a pause on tariffs for some countries, even as those for China are raised to 125% effective immediately. The White House went on to clarify that Trump’s announcement of a 90-day tariff “pause” means that the “tariff level will be brought down to a universal 10% tariff” during that time, while “negotiations are ongoing.” 

The list of non-retaliating countries includes most of U.S. trading partners in Asia except China, but for now, there are questions as to whether that list includes the European Union and Canada, both of which have hit back with retaliatory tariffs.

We’ll look for clarification on that but for now it seems the market is overlooking those items as it rebounds once again from being oversold. The higher level of tariffs on China as well as the lower 10% universal tariff being implemented will still pose an issue for corporate guidance for the June quarter. Some of the weight that has been bearing down on the market has been removed, but not all of it. And as Trump-led trade negotiations occur over the ensuing weeks, some of that removed weight could very well return.

Given the market action over the last week, odds are some of what is fueling today’s move higher is short-covering. We understand how that can lift a stock and/or the market, sometimes to levels that don’t reflect the current situation or outlook, only to see a give-back of those gains in short order.

With the ball back in China’s court, the EU still formulating its plan, and March-quarter earnings about to heat up and bring another round of tariff insight with them, we will continue to tread carefully given some of the new uncertainties outlined above, even as we enjoy the follow through of this afternoon’s market bounce on TheStreet Pro Portfolio.