US import tariffs may shift under Trump, traders favor foreign stocks, Macquarie says
2025.01.07 11:10
Investing.com — There’s a growing belief that President-elect Donald Trump will adopt a transactional approach to US import tariffs, according to a Macquarie strategist on Tuesday.
Macquarie said in a note that the perspective has been reflected in recent trading sessions, where traders have shown a preference for foreign stocks over US stocks.
The shift in focus may be due to the recent increase in UST yields, which has prompted some traders to question the high valuations in US stock indexes and look elsewhere, Macquarie noted.
Another possible factor could be the Wall Street Journal’s report on a flexible US import tariff policy. While Trump denied the report, calling it ‘fake news’, it has nonetheless resonated with many traders.
The US dollar’s weakness, evident in yesterday’s session, has continued into today’s trading. This suggests that traders are not entirely convinced by Trump’s denial and are open to the possibility of a more benign international policy agenda under his administration.
The Macquarie strategist believes that Trump is indeed likely to be transactional. They suggest that Trump would prefer to secure concessions from US allies rather than impose sanctions on them. Such concessions would be seen as a political victory for Trump in the US.
However, the strategist predicts less scope for a transactional approach with China, expecting punitive tariffs instead. This is due to the perception of China as a strategic competitor, or even a threat, to the US.
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