And just like that, the relative calm in the US trade war against almost everyone (shout out to Russia for remaining exempt from any US tariff action) ended on Friday when President Trump recommended a new 50% tariff on European goods.
The threat of 25% tariff on an American champion, Apple, for goods it makes outside the US, was tacked on for good measure.
Wall Street fell in the wake of the resumption of hostilities, but it was more a “here we go again” orderly exit to the bomb shelter, than a mad panic, hair-on-fire response.
The Dow, S&P 500 and Nasdaq fell 0.6%, 0.7% and 0.9% respectively.
Apple was a significant casualty, falling 3%, having earned the President’s ire.
Europe fell harder. The Dax and broader Eurostoxx 600 both fell 1.5%, while in the UK, which has already cobbled together a fairly meaningless trade deal with US, the FTSE was down a more modest 0.2%.
Futures traders on the ASX also took a more sanguine view on the “déjà vu all over again move”, with the ASX SPI 200 down 0.4%.
“If I were to put a headline on today’s story, it would be ‘Here We Go Again!'” Ocean Park Asset Management CIO James St. Aubin told Reuters.
“This is Trump turning on the temperature on the tariff conversation with the EU and Apple,” he said.
“The markets were hoping that the worst was behind us when it comes to the tariff rhetoric. But in reality, there’s still some smouldering embers when it comes to the tariff talk.”
US Treasury Secretary, Scott Bessent, wasn’t having any “smouldering embers” metaphors, hoping the new threats would “light a fire under the EU” in negotiations.
“Plus ça change, plus c’est la même chose,” as they may have sighed across the Atlantic.
This morning EU President Ursula Von Der Leyen tweeted she had a good call with President Trump and saying Europe is ready to advance talks swiftly but needs time to reach a good deal.
Over the week, the three US indices were down around 2.5%, while Europe fell 1.6%.
The ASX, battling its little contrarian heart out, eked out at 0.2% gain.
Bond yields were generally higher in the US, Europe and Japan, although a bit lower in Australia, thanks to the RBA’s dovish commentary accompanying last week’s rate cut.
The US dollar continued to be sold off against most major currencies, adding to mounting evidence it has lost its lustre as a safe haven when markets get the staggers.
That helped push the Australian dollar higher to just under 65 US cents.
Oil also edged higher on Friday but was down over the week.
Gold (+1.9%) held its position as a safe haven, benefiting from another bout of global uncertainty and gaining almost 2% on Friday,
Iron ore edged down 1% but continues to wobble around $US100/ tonne.
