Deutsche Bank is out wit ha quick note on the tariffs:
Quick summary of President Trump’s announcements: tariffs on the American continent are lower
than expected, European tariffs are as expected, tariffs on Asia significantly
higher than expected. There should be a straightforward FX re-adjustment
between Asia FX (weak) and Latam FX + CAD (strong) in coming days.
Going forward, they are watching for whether China will allow yuan devaluation or will try to negotiate away the 20% fentanyl portion of the tariffs.
The negative global spillover to the rest of the
world in coming days will largely be determined by the extent to which China
allows the policy-determined USD/CNY to move materially above 7.20 or decides
to do more fiscal stimulus instead.
That’s some straight-forward analysis.
My guess is that China lets it play out for awhile and lets the US alienate its allies, while stepping into the void.