Investment Brief: Trump and Tariffs

Trump kicked of the month of March by announcing import tariffs of 10% on aluminum and 25% on steel. The U.S. financial markets, as expected, reacted negatively to the initial announcement with the Dow Jones Index falling over 400 points and major aluminum and steel users such as Ford and GM being particularly hard hit. Canada and the EU, the two largest exporters of steel to the United States, came out strongly against the tariffs, with the EU proposing retaliatory actions on certain U.S. goods in response. The current developments are unlikely to lead to a trade war. Nonetheless, there remains an element of uncertainty that could play out in different directions over time.