He April 30 were 100 days since Trump assumed his second mandatea traditionally reserved moment to take stock of the president’s first achievements.
During your investiture, Trump promised a new ‘golden age’ for Americans. Although he inherited an economy in good shape, in just three months the situation has changed towards a political uncertainty comparable to that lived during the global financial crisis or pandemic. The probabilities of recession range between 40â € ¯% and 90â € ¯%, depending on who is consulted.
In these first 100 days many things have happened. Recent events have questioned the narrative of the ‘American exceptionalism’ which has promoted the superior performance of US bags in recent years, especially of great technological ones.
At times, the sensation has been that everything happens everywhere and at the same time. The strategy of flooding media space with news and policy ads hinders monitoring. And the constant change of context complicates investment decision making with a high level of conviction. In financial markets, the dominant feature has been the implementation of the highest tariff regime since the 1930s.
What assets have they done well in this context? Gold has risen almost 19â € ¯%, like many other assets measured in dollars, since the currency has weakened considerably. Traditional shelters such as the dollar have lost value: the index of the US dollar fell 9.08â € ¯% between January 20 and April 30, after rising 11.85â € ¯% in the previous five years.
The American variable income initially received Trump with enthusiasmWaiting for a repetition of its first mandate: the S&P 500 registered its best after -electoral behavior, promoted by the expectation of lower regulations and tax cuts. However, the focus of the new administration has been the commercial deficit, and the wave of tariff advertisements has generated uncertainty in the markets.
After the ads, the volatility shot. Although there was some recovery in the second half of April, enough to erase losses after ‘Liberation Day’the index follows 8â € ¯% below the historical maximum of February 19. The administration has been indifferent to stock market movements. Scott Besent, secretary of the Treasury, described the corrections as’ healthy and ‘normal’. The most important tensions were seen in the public debt market, whose turbulence forced the pause in reciprocal tariffs, which were in force only 13 hours.
Trump now wants to turn a page in tariff matters and focus attention on more positive aspects of his agenda, especially tax cuts, which would extend those applied during his first mandate. However, by the time that measure is launched, the US economy could already show signs of slowdown, and it remains to be seen if the bond market will tolerate policies that increase the budget deficit further.
With approval rates of the low -hall, President Trump will want some vote favorable policies to be priority before the half mandate electionsin which traditionally the match in the White House loses seats. A defeat, that is, to lose control of Congress at the hands of the Democrats, would probably generate much higher levels of intervention of their policies and a political resistance greater than what we are currently seeing.
The next months should reveal to what extent Trump is ideologically committed to tariffs. Problems in supply chains, empty shelves or more expensive products could further worsen the mood of the consumer.
The current 90 -day tariff extension expires on July 9. The market expects this moratorium to extend or renegotiate with many countries. Even so, we will continue with the highest tariff level in 90 years. We are more likely to see striking agreements, but with little substantial content, especially with countries such as South Korea, Japan or India. The agreements with the EU and China seem much more complex.
We are very far from the era of free trade that ended with the beginning of the mandate of Trump 2.0. A return to an effective tariff of less than 3â € ¯% – like the one enjoyed in recent years – seems distant today.
Any economic impulse derived from industrial relocation will take years to materialize. Replace products manufactured abroad will take timeand the highest internal labor costs will imply price increases. Many companies will not transfer their production until they see greater stability and predictability.
Are we before the end of American exceptionalism? The immediate future of the Variable Income of the United States will not depend solely on tariffs. The evolution of the S&P 500 could also be influenced by the ability of large technological ones to make their investments in artificial intelligence, despite the weak behavior of the sector so far this year.
Bet against the US. It has been a failed strategy in recent years. Only time will say if this stage of Trump marks a definitive turn towards a more isolationist country and a new global order. Despite all the uncertainty, USA continues to lead growth between G7 economies, both this year and next. If these 1,361 days are just a bump, it can be expected that the dynamism and entrepreneurial spirit of the United States prevail in the long term. Even with an isolationist president, these strengths will continue to present, although a closed America will be poor economically, just like the rest of the world. That means that either striking agreements will be closed for the holders or the process will be extended, increasing the risk of significant damage to the global economy, and especially that of the US. UU.
They are already reporting falls Substantial in shipping volumes from China to the US, with anchored ships in front of Los Angeles waiting to be able to download Chinese merchandise, possibly lower rates.
As inventories in the US are reduced, there are warnings on empty shelves and price increases. A scenario that will probably hit consumer confidence even more and, consequently, presidential approval rates.
Analyzing this fluid situation around tariffs, its scope and duration is not simple. Trump’s policies could end up being transitory for some commercial partners, but the possible scenarios vary from a total commercial war (and recession) to a ‘free’ trade with rates much higher than we have seen in 90 years.
Therefore, there will be impacts on the Growth and inflation in the USas well as specific results in other countries.
Even if there is de -escale, The 90 -day window to negotiate will imply damage to supply chains. In addition, impacts on business and consumer confidence data are already being observed, and the 10% global tariff is already implemented and will remain.
The market recovery Last week it was due to greater optimism about tariffs and Trump’s posture change compared to Jay Powell.
Since the markets have been very weak, any specific positive news about Commercial or de -escalated agreements could promote feeling. However, it is crucial that firm news arrives soon, since the lack of trade between the main economic powers will have serious economic consequences, not only for the US and China.