US Economy: Trump’s Tariff Spree Is Set To Create More Mayhem: Here’s How

5 months ago 22

Donald Trump has erstwhile again struck the marketplace with a caller spree of tariffs. The US president has levied 25% tariffs connected the European Union, followed by deploying an further 10% tariffs connected China. Minutes aft the aforementioned tariff announcement, the cryptocurrency marketplace felt the aftereffects of it, with Bitcoin plunging beneath $80K terms levels. Are Trump’s tariff spree ideations spelling occupation for the US economy? Let’s find out.

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Trump’s Tariff Strategy: A Blunder oregon a Boon?

US President Donald TrumpSource: LA Times

Donald Trump is presently connected an assertive tariff spree. The 47th US president is presently engaged imposing tariffs connected nations, levying 25% and 10% tariffs connected imports from the EU and China, respectively. Trump’s tariff decision had a monolithic planetary effect, with markets tumbling down owed to the rising commercialized warfare fears.

At the aforesaid time, Trump has besides levied taxes connected Mexico and Canada, sparking issues for US automakers.

Per a station by the Kobeissi Letter, the United States’ determination to enforce tariffs is particularly concerning for the US system automakers arsenic it would rise costs for the car manufacturers. For instance, this tariff would extremity up adding $3000 to immoderate 16 cardinal cars sold successful the US each year.

At the aforesaid time, the tariff volition besides beryllium impacting the nutrient prices, arsenic Mexico is liable for supplying astir 60% of the caller nutrient to the US.

“For example, a 25% tariff connected Canada and Mexico raises costs for US automakers. This tariff would adhd ~$3,000 to the terms of immoderate of the ~16 cardinal cars sold successful the US each year. Food costs are acceptable to emergence arsenic well, with Mexico supplying implicit 60% of caller nutrient to the US.”

What's adjacent much telling is the Volatility Index, $VIX.

Even arsenic the S&P 500 has traded adjacent oregon astatine each clip highs this month, the $VIX has been rising.

It's present up implicit +30% since February 14th and continues to rise.

Volatility is present to stay. pic.twitter.com/10Il5aSrpI

— The Kobeissi Letter (@KobeissiLetter) February 26, 2025

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Volatility Index Peaks to New High

The Volatility Index, popularly referred to arsenic the VIX index, has besides peaked astatine a precocious of -30% since February 14, 2025.

The VIX scale mostly measures however overmuch the marketplace is going to fluctuate successful the adjacent 30 days.

“What’s adjacent much telling is the Volatility Index, $VIX.Even arsenic the S&P 500 has traded adjacent oregon astatine all-time highs this month, the $VIX has been rising. It’s present up implicit +30% since February 14th and continues to rise. Volatility is present to stay.”

What's adjacent much telling is the Volatility Index, $VIX.

Even arsenic the S&P 500 has traded adjacent oregon astatine each clip highs this month, the $VIX has been rising.

It's present up implicit +30% since February 14th and continues to rise.

Volatility is present to stay. pic.twitter.com/10Il5aSrpI

— The Kobeissi Letter (@KobeissiLetter) February 26, 2025

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