Originally published by AxiTrader
At a press conference with Israeli Prime Minister Benjamin Netanyahu overnight, President Trump reinforced that he is on track to implement his tariffs on steel and aluminium.
Yet despite that assertion, there was a real sense across financial markets that the tariff plan won't be put to work and that it actually just a negotiating position the President has taken to try to win better deals in global trade and more pointedly in the current renegotiations of NAFTA.
I was originally leery of that theory - that's it's just a negotiation stance - but having thought about it for a few hours and watching what President Trump said, what he tweeted, and what his trade negotiator Robert Lighthizer said maybe, just maybe, this theory has legs.
Speaking with Netanyahu President Trump said, "No, we’re not backing down, We had a very bad deal with Mexico, we had a very bad deal with NAFTA". He had earlier sent the following tweet:
That certainly fed the "negotiating tactic" narrative.
Subsequent to the above I noted a series of tweets and retweets from Ant Barton at MNI News which suggested trade negotiator Lighthizer was on the same page as the President.
But as you can also see in that thread the Mexican Economy Minister and Canada's Foreign Minister Chyrstia Freeland both suggest there is still a lot of work to be done to get a deal done.
That's important because for a negotiating tactic to work the president needs to get what he is looking for and what his partners in NAFTA are willing to give. We'll have to wait till the next round of talks beginning April 9 to know how things are going to track.
Much past that and the November mid-terms come into view in the US with the Mexican Presidential election is in July.
But a negotiating tactic does appear to be a credible narrative to embrace.
But one that falls down, as Business Insider's Jonathan Garber pointed out to me on Twitter. The President has said he is going to announce the tariffs this Thursday.
So the threat of a trade war hangs over the global economy and markets and we'll all be watching the President's tweets closely.
Equally though, as I have written recently, uncertainty and volatility is rising, and while talk of a trade war remains elevated sentiment - and markets price action - is likely to remain fluid.
Have a great day's trading.