“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” Trump said on Truth Social on Nov. 25.
Tariffs? on day one we were told. Did that happen? NOPE.
Instead Trump issued a memorandum, yesterday ordering federal agencies to EVALUATE US TRADE POLICY AND GAVE THEM UNTIL APRIL 1. SO YEAH, NO TARIFFS ON DAY ONE AS WAS PROMISED.
The bond market reacted immediately figuring the threat of tariffs is not immediate.
Probably all bluster for now. What did Trump do in his first term? Trump talked a lot about tariffs but he didn't do anything for the first two years until his tax cuts got done. That was the first priority. Get the corporate tax cuts done as a cushion then hit people with tariffs. So again, he likely won't start a trade war until his corporate tax cuts get done as they are a cushion for corporate profits. The last time he did corporate tax cuts business investment went down to zero even with tax cuts and the stock market went down 20% in late2018. So corporate tax cuts need to happen first. Their main goal right now is get the corporate tax cuts done. The economy started improving in 2019 then Covid happened. So we know the game plan, get the corporate tax cuts done then look at tariffs.
The executive order signed last night ordering "emergency price relief lowering cost of housing and expand housing supply". How is that going to happen? Its not . The idea is that lowering regulation and cost of building by 25% will cause home prices to fall. What world do politicians live in? First of all this would only impact prices on new construction and do you see builders knocking prices down because they were able to build cheaper? NOT. Home prices are not going to fall because of an executive order. The only thing that can drop the cost of housing is lower rates. Again, that's pretty much it. Rates revolve around the 10 year yield and that's the real impact on housing.
Immigration policy impact on housing. 10 XO last night on immigration. Builders will find workers if demand picks up. Don't worry about that. They will find the labor, somehow. Even if they have to pay more. Some people say deportations will have an impact but i don't agree.
Trump
Biden
Trump again
Let's not expect any big surprises either way.
First tariffs are scheduled to start Feb 1.
He is giving the countries effected some time to respond before they are implemented.
If energy prices drop, it will effect housing costs and the price of energy is already down, almost 5% in less than a week.