The Tariff Announcement That Shocked Financial Markets

Odd Lots

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🗓️ 3 February 2025

⏱️ 23 minutes

🔗️ Recording | iTunes | RSS

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Summary

Over the weekend, President Trump announced that he was following through with his plan for aggressive tariffs. Imports from Canada and Mexico will now be hit with a 25% tariff, while China will get a 10% tariff. Although aggressive action was promised during the campaign, the news still rattled global financial markets, sending futures tumbling and the dollar spiking. Then, on Monday, Mexican President Claudia Sheinbaum announced that after a discussion with Trump, the tariffs aimed at her country would be delayed by a month. Meanwhile, more talks with Canada and China are expected. So what exactly are the economics of such tariffs? Are they inflationary? Who pays for them? And what are the implications of these ongoing threats? On this episode, we speak with Paul Donovan, chief economist at UBS Global Wealth Management, who answers all of our questions on the still developing news and how things might play out.

Read More: How Trump’s Tariffs Aim a Wrecking Ball at the Economy of the Americas

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Transcript

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0:00.0	Donald Trump has already changed the way we think about the US economy. Now he's back in the White
0:05.5	House and Bloomberg's Trumponomics podcast is here to help. I'm Stephanie Flanders, head of
0:11.6	government and economics at Bloomberg. Whatever the big question of the week is, we'll have something
0:16.2	interesting to tell you about it in a lively conversation with the reporters and analysts closest to the action.
0:22.3	Listen to new episodes every Wednesday and follow Trumponomics on Apple Podcasts, Spotify, or wherever you listen.
0:30.3	Hello, Oddlod's listeners. This is Joe Wisenthal. You are listening to an emergency episode of the podcast.
0:37.4	It was recorded at 10 a.m. Monday morning,
0:41.6	February 3rd. The reason I am telling you this is because markets and news are moving very
0:47.5	fast. And so by the time you listen to this, parts of it may already be out of date. But the context for
0:53.5	the discussion was over the weekend,
0:56.6	Trump announcing 25% tariffs against Canada and Mexico, 10% tariffs on oil, another 10% tariffs
1:04.6	on China. Since we recorded this about a minute after we got out of the studio, Mexican President Claudia Scheinbaum announcing that the tariffs had been delayed on Mexico for a month.
1:17.2	We're still waiting to hear if something similar happens in Canada.
1:21.6	Other than that, take a listen. Bloomberg Audio Studios
1:28.4	Podcasts Radio News
1:31.4	Hello and welcome to another episode of the Odd Lots podcast. I'm Tracy Allaway.
1:46.7	And I'm Jill Wisenthall.
1:48.0	Joe, how many of these emergency episodes do you think we're going to need to do over the next four years?
1:53.8	Oh my God. You know, well, anyway, I don't know, but this is two weeks in a row. A week ago, you know, we had to rustle up a deep seek expert last Monday, this time a trade expert.
2:05.3	That's right.
2:05.9	I feel like we might as well just preemptively convert the show into a daily because I feel like there's going to be a lot of news flow.
2:12.0	But anyway, as you mentioned, over the weekend, President Trump basically confirmed that the U.S. would be imposing
	...

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