Markets get a Trump reminder: Wait for the cameras
Add Axios as your preferred source to
see more of our stories on Google.
The wild gyrations of the Canadian dollar offer a valuable reminder to markets: There's what other people say Donald Trump will do, and what Donald Trump says he'll do.
Why it matters: The difference between the two can be worth billions of dollars.
Catch up quick: On Monday Trump's team gave the Wall Street Journal an early look at an executive order mandating tariff investigations — but not actually imposing tariffs.
- Trump's team told the Journal he was approaching trade "in a measured way."
- The Canadian dollar promptly rallied to its strongest levels in more than a month, as the specter of Trump's long-threatened tariffs eased.
Between the lines: It was the latest in a series of leaks and trial balloons out of his camp, all aimed at shifting the narrative: Trump's not actually going nuts with tariffs, this will all be strategic and targeted.
Yes, but: Then the cameras entered the Oval Office.
- Even as Trump signed the "measured" order, he told onlookers he was considering imposing a 25% tariff on Canadian and Mexican goods on Feb. 1.
- As quickly as the C$ had rallied, it fell right back down.
- The chart above makes it clear: The U.S. dollar plunged against the Canadian dollar on the initial report, and then surged when Trump spoke. (Higher tariffs = stronger dollar, as research has shown.)
Zoom out: Anyone who follows Trump knows there's often a gulf between what people around him say he's thinking or doing, and what he ultimately says (or does).
- He knows it too, and leans into it.
- "Some of Trump's closest advisers would clearly like to limit the scope and size of those tariffs, but we suspect that Trump himself remains steadfast in his protectionist intentions and he will eventually win the internal debate," Capital Economics chief North America economist Paul Ashworth wrote Monday.
The intrigue: Which to believe: His aides, with their careful preparation; or the president, a legendary crafter of soundbites?
- It's always been an open question, one without a clear answer, though on balance Trump does tend to get what he wants.
- As Axios' Marc Caputo notes, the days of Trump's staff undercutting him and keeping him from doing what he wants appear over.
The bottom line: All the documents, briefings and plans in the world don't really matter much when Donald Trump has access to a TV camera.
Nathan Bomey contributed.
