Insights

Weekly Market Commentary – 24th January

29 January 2025

This week it was impossible to avoid Donald Trump’s tariffs. Like a toddler with a new toy, Trump is using tariffs on everyone and everything. Mexico and Canada are threatened with 25% tariffs for failing to stop the flow of drugs and illegal migrants. Tariffs of 10% are promised for China,but these could be jacked up to 100% if TikTok’s Chinese owners don’t sell it to a US company. There are also promises of tariffs for the EU, if theblock doesn’t buy more US oil. And Russia faces further sanctions – including tariffs – if it doesn’t come to the table over Ukraine. Opinion is divided over whether Trump is serious about imposing tariffs or whether they are just bargaining chips. The threat of tariff was widely anticipated and with the exception of some currencies markets have been positive. Trump also raised the potential for international tax disputes by ending US participation in a global tax deal designed to stop companies cherry-picking where they pay corporation tax. The withdrawal was backed by threats against countries which levy additional taxes on US firms. The penalty suggested by the White House? Yes, yet more tariffs.