Trump’s tariff threat then backdown cycle – market sees “boy who cried wolf”

A couple of snippets from analysts on Friday, that have proved prescient, comments indicating Trump’s tariff threats being viewed as hollow.

Vanguard:

• investors expect the steep 50% tariff proposal on imports from the E.U. to be negotiated down, similarly to what happened with China
• market has slowed down now because it’s happened before, and we know what happened before
• “It’s kind of like the boy who cried wolf”
• administration is not crazy, they have a plan and there is a limit,” to how far they will go

Barclays:

• threats on the EU are ‘primarily a negotiating tactic’
• “the US has not turned the page on tariffs and that more trade policy volatility lies ahead”

This article was written by Eamonn Sheridan at www.forexlive.com.