Jun 5, 2019

Investors question the motive behind Trump's Mexico tariffs

Photo: Dan Kitwood/Getty Images

Though President Trump insisted he plans to follow through on his threat to add escalating tariffs to all goods imported from Mexico, suspicion is beginning to grow among asset managers.

What it means: The timing, lack of clarity and lack of policy action or precedent has some wondering whether the president's actions are less about punishing Mexico and more an attempt to get the Fed to cut rates in order to stimulate the economy ahead of 2020.

What they're saying: Mick Mulvaney, the acting White House chief of staff, said on "Fox News Sunday" that Trump was "deadly serious" about the tariffs, but acknowledged there was "no specific target" and no concrete benchmarks to judge whether Mexico was stopping the flow of migrants from Central America into the U.S. as Trump demanded.

The other side: Afsaneh M. Beschloss, founder and CEO of asset management firm RockCreek, said Tuesday at the Bloomberg Invest conference in New York that Wall Street is starting to wonder aloud about the president's intentions.

"Looking at what's going on with trade, one question some people are asking is why are there so many tweets and why so much attention to trade at this particular moment. Because we know the president is one of the smartest when it comes to politics."
"We're out of fiscal policy options, since it's unlikely Congress can come to an agreement, and we know that the Fed is independent. So is the causal effect here to push the news on trade to a point that it might impact interest rate decisions? Some people are starting to talk that way."

Go deeper: Trump's Mexico tariffs would constitute the biggest tax hike in 30 years

Go deeper

Tech can't remember what to do in a down market

Illustration: Rebecca Zisser/Axios

Wall Street's two-day-old coronavirus crash is a wakeup alarm for Silicon Valley.

The big picture: Tech has been booming for so long the industry barely remembers what a down market feels like — and most companies are ill-prepared for one.

Brace yourself for a coronavirus outbreak

Illustration: Aïda Amer/Axios

Public-health officials’ warnings about the coronavirus are sounding increasingly urgent, with one top CDC official asking the public yesterday "to prepare for the expectation that this might be bad."

Reality check: Other administration officials, including President Trump himself, were more subdued in their assessments. But underneath those tonal differences, the reality of the coronavirus is the same: It spreads quickly, and has already spread to many countries, making it likely to start spreading here, too.

Exclusive: Pro-Trump group plans post-Super Tuesday blitz on Democrats

Democratic presidential hopefuls take the debate stage in South Carolina. Photo: Logan Cyrus/AFP via Getty Images

Pro-Trump super PAC America First Action is preparing to unleash a series of targeted, swing-state attacks on the Democrats most likely to face President Trump after Super Tuesday, people familiar with the group's plans tell me in an exclusive preview of its strategy.

The state of play: The group has been tracking favorable/unfavorable ratings in Florida, Georgia, Michigan, North Carolina, Ohio and Pennsylvania for 2020 candidates Joe Biden, Bernie Sanders, Elizabeth Warren, Pete Buttigieg and Michael Bloomberg — under the theory that if Trump wins each of these six states he would win re-election.