Trump Steps Up Trade War With Canada Threatening a 35% Tariff

Tariff Uncertainty & Deadlines - The market faces uncertainty regarding President Trump's tariff threats, with August 1st as a key deadline [1][2][4][15] - Negotiations are crucial; positive outcomes could lead to further exemptions, while failures may trigger tariff increases [2][3][15] - Clients are advised to closely monitor the news cycle for updates on negotiations [2] Political & Policy Considerations - Tariffs on Brazil are more of a political issue related to President Trump's views on former President Bolsonaro [3][4][6] - The US-Brazil relationship is unique due to this political dimension [4] - President Trump's use of the International Emergency Economic Powers Act (IEEPA) to implement tariffs is facing legal challenges [6][7] Implementation & Market Impact - Markets are largely pricing in the new round of tariffs as status quo [8] - The President aims to avoid tariffs that harm US consumers [9][10][11] - USMCA goods from Canada are not impacted by the additional 10% tariff, limiting the impact on US consumers [10] - Rising prices at grocery stores and major retailers could prompt President Trump to reconsider tariffs [11][12] Legal Challenges & Timelines - Court proceedings challenging the tariffs are ongoing, but courts move slowly [12][13] - The Supreme Court could potentially hear the case later this year [14] - Market participants desire immediate certainty, which the courts cannot provide [14][15]