Mr. Trump imposes an additional 10% tariff on China: Here's how analysts view it.

November 26, 2024, 11:55 AM GMT+9

On the 25th, President-elect Trump announced that he will impose a 25% tariff on all imports from Mexico and Canada on his first day in office, and an additional 10% tariff on imports from china. He cited concerns related to illegal immigration and illegal drug trade.
Asked market participants for their views.
◎ Early renegotiation of trade agreement with Mexico and Canada also possible
<TD Securities' macro strategist, Mr. Alex Lu>
The renegotiation of the United States-Mexico-Canada Agreement (USMCA) is scheduled for 2026, but with today's tariff announcement, President Trump will likely start reassessment work with Canada and Mexico sooner.
Mexican peso and Canadian dollar reacted by dropping, but thin liquidity during North American off-hours may have led to significant movements in Asian morning trading.

◎ Uncertain if it will come to fruition
<ING (Singapore) Research Department Regional Representative, Mr. Rob Carnell>
I remember four years ago. It was a time when every morning I woke up to the market being tossed around by the latest comments. Since Mr. Trump was not yet the president, I wanted to think with some discount. Mr. Trump moves things forward in this way. He says various things, refers to many numbers, and the market reacts to them. It may or may not come true.

◎Watch out for pressure on Chinese assets, including 60% tariffs
<Natixis (Hong Kong) Senior Economist, Mr. Gary Ng>
Undoubtedly a shock to the market, Chinese assets, especially the export sector affected by additional tariffs, are under pressure.
Investors will pay attention to following announcements related to this, as opposed to tariffs on Canada and Mexico, the tariffs on China are not as significant. They will watch whether the 60% tariff announced by Mr. Trump will actually be imposed and the timing of it.
◎Mentioning reasons, tariffs may be conditional
<ANZ (Singapore) Head of Asia Research, Mr. Koon Go>
It seems that Mr. Trump does not waste much time. The issue is whether Mr. Trump will actually run it on the first day of his presidency and whether tariffs will be applied.
Another interesting point is that by disclosing the reasons for imposing tariffs (concerns about immigration and drugs), Mr. Trump seems to be making them a condition for these tariffs.
This may be just the beginning of the well-known deal Trump is famous for in his first attack.

Currency depreciation is short-term, the market's focus is on the FOMC.
<Senior Currency Analyst at ITC Markets, Mr. Sean Carroll>
Since Mr. Trump said just last month that the most beautiful word in the dictionary is tariffs, there should be no surprise in Mr. Trump's intentions, but rather the timing of the statement.
It is natural for currency depreciation sensitive to trade to continue in the short term, considering a quiet schedule. However, as the December meeting of the Federal Open Market Committee (FOMC) approaches, the Federal Reserve Bank's policy will once again become the focus.