• 48 mins Airlines Could Recover, But Crew Remain Elusive
  • 1 hour Meet The Man Behind The World's Most Exciting Oil Play
  • 1 day Crypto-Mining Immigration Could Be The Start Of A New Trend
  • 3 days Hawkish Fed Sends Gold Prices Crashing
  • 4 days Bezos Is Heading To Space This Sunday
  • 7 days El Salvador’s Surprise Bitcoin Move
  • 10 days Markets Unfazed As Inflation Hits 13-Year High
  • 11 days How the Token Economy is Disrupting Financial Markets
  • 13 days FBI Investigating 100 Types Of Ransomware Attacks
  • 15 days Fed Ends Corporate Credit Emergency Lending Program
  • 17 days AMC Becomes the Latest Winning Meme Stock After GameStop
  • 18 days The Real Reason Your 401k Has Been Lagging
  • 19 days China Lifts Cap On Births, Allows Three Children Per Couple
  • 21 days The Market Is Ripe For Another GameStop Saga
  • 24 days Senate Grills Big Banks Over Pandemic Opportunism
  • 26 days Cannabis Has A Major Cash Problem
  • 26 days Ransomware Netted Criminals $350M In 2020 Alone
  • 27 days Russia Is Taking On Google
  • 28 days Chinese Regulators Deal Another Big Blow To Bitcoin
  • 29 days Ohio Residents Brave Vaccine for Chance To Win $1M
Could This Be The Hottest Commodity Play Of 2021?

Could This Be The Hottest Commodity Play Of 2021?

The rapid rise of lithium-ion…

China Lifts Cap On Births, Allows Three Children Per Couple

China Lifts Cap On Births, Allows Three Children Per Couple

Following a politburo meeting chaired…

Facebook Plays Dirty Down Under

Facebook Plays Dirty Down Under

Facebook announced it will block…

Charles Benavidez

Charles Benavidez

Staff Writer, Safehaven.com

Charles Benavidez is a writer and editor for Safehaven.com. Charles is located in New York City and has over 5 years of experiencing covering financial…

Contact Author

  1. Home
  2. News
  3. Breaking News

Wall Street Rallies After Trump Tariffs Lose Their Bite

Trump

Canada and Mexico will be indefinitely exempt from U.S. steel and aluminum tariffs imposed by Trump late yesterday, and other countries will be able to negotiate exemptions, too—so all the bluster about dangerous tariffs and a looming trade war just faded, as far as the market is concerned.

After the closing bell yesterday, the Dow gained 93 points.

Trump has a tried-and-true MO of raising the stakes on a big issue, and them implementing something much softer. Lobbyists buy it, for a time. Voters buy it, and the stock market buys it, too.

While Elon Musk likened the tariffs to an “Olympic race wearing lead shoes”, at the end of the day, and as further details emerged, what we got was a watered-down version of tariffs that isn’t likely to ruffle nearly as many feathers, outside of Asia—the original target. 

Trump traded lead shoes for a trimmed down pair of steel-toed boots. It’s not Olympian; but neither is it debilitating.

The tariffs will go into effect in 15 days, and this is what you need to know:

Canada is the biggest supplier of steel and aluminum to the United States (no, it’s not China). The U.S. and Mexico are Canada’s top two markets for steel exports, accounting for 97 percent of the total. In 2016, Canada sent 87 percent of its steel to the U.S., and 8 percent to Mexico. Last year, that figure was 84 percent.  

While everyone was wondering why tariffs ended up looking like an attack on Canada instead of China, it emerged that the U.S. administration expressed concerns that Chinese steel and aluminum products were coming into the U.S. through Canada. It was an idea that Canadian Prime Minister Justin Trudeau found unrealistic, at best.

According to Canadian media, citing an unnamed official, Trudeau told Trump that Canadian steel and aluminum workers would be surprised to hear the products they were manufacturing were Chinese. Related: PayPal Gets A Boost From Its Crypto Patent

So Canada won an exclusion, and there may or not be a trade-off.

According to Politico, a senior U.S. official said that Canada (and Mexico, too) will have to negotiate “some agreement to address the threat to U.S. national security caused by their steel and aluminum exports to the United States”.

But Canada and Mexico are also the top destinations for U.S. steel exports. Canada was the largest market for U.S. exports of steel, accounting for 50 percent of the total in 2017. Mexico took in 39 percent of total U.S. steel exported last year.

(Click to enlarge)

Mexico accounted for 9 percent of all U.S. steel imports last year.

(Click to enlarge)

Now, there’s talk of other possible exemptions, and Trump has specifically hinted that Australia will be among them.

“We have a very close relationship with Australia,” Trump said. “We have a trade surplus with Australia. Great country, long-term partner. We’ll be doing something with them. We’ll be doing something with some other countries.”

By Charles Benavidez for Safehaven.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment