Before Sunday night’s rout in futures turned investor attention squarely to fears about what China’s DeepSeek AI might mean for the future of the US-centric AI investment boom, this past weekend saw President Trump remind investors that tariffs are still at the top of his agenda.
Though a back-and-forth between the White House and Colombia saw the South American nation ultimately accept a deal to take in migrants being deported from the US to avoid immediate 25% tariffs on exports bound for the US, the speed with which the president acted is the key takeaway for investors.
“Tariffs are coming,” wrote Neil Shearing, group chief economist at Capital Economics, in a note on Monday.
“That seems to be one of the key takeaways from an extraordinary week which began with relief that the new president’s inaugural address skipped talk of tariffs, but was followed by a stream of threats from Donald Trump to start raising duties on leading trade partners — and ended with reports suggesting tariffs could be imposed on Mexico and Canada as soon as this weekend.
“All of this has poured some cold water on the idea, still lurking in some parts of the market, that the threat to impose tariffs was bluster. It now seems likely that higher tariffs are in the pipeline and, as we have embedded in our central forecasts, that they could be imposed relatively soon.”
Trump’s first week in office, as Shearing notes, was greeted with relief from investors as Trump declined to impose new duties on any major trade partners in an executive action on Monday.
The president later set a Feb. 1 deadline for taking firmer action.
How tariffs have become enmeshed with the fate of TikTok, for instance, ought to serve as a reminder that while the economic implications of tariffs are of interest to investors — notably the impact on inflation and interest rates that may result from higher tariffs — what they symbolize is more important.
Namely, tariffs are the best way for an investor trying to understand Trump’s mindset at any given point in time to get a firm answer.