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THE RETURN OF DAILY TARIFF WORRIES?

It looks like tariffs are making their way back onto the daily ‘things to think about’ agenda – the U.S. this week outlined tariff plans for generic drugs, and unveiled duties on goods imported from Canada and Brazil.

And with a temporary 10% baseline tariff expiring later this week and various trade investigations ongoing, more duties targeting countries, individual products or industry sectors could be coming, Mark Haefele, UBS Global Wealth Management chief investment officer, said in a note.

But the question is how strongly the administration want to push things.

“Elevated inflation and persistent affordability concerns are likely to constrain how aggressively the Trump administration can raise trade barriers without adding further pressure on household budgets,” Haefele said.

And some are wondering whether there is a longer term ploy afoot.

Neither of the country-specific duties “makes economic sense looking at the balance of payments: both do if the US wants to impose a common external tariff vs. China,” Michael Every, global strategist at Rabobank, said.

He said reports the US risks losing its crown as the world’s largest food exporter, "would make having rising star Brazil on their ‘team’ helpful, geostrategically."

(Sophie Kiderlin)

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