Bark v bite : Mexico tariffs on hold
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Why did President Trump postpone Mexico tariffs for a month?
So is Donald Trump's bark worse than his bite. Here we are on the day when tariffs supposedly start across the Mexican border. But now they've been delayed for a month of negotiations. Uh we'll look at the response to that now and what could happen in the future as well if the US carries out those tariffs on China and Canada, and the threats to Europe as well. And where's the Aussie dollar in the midst of all of this as well? It's Tuesday, it's the fourth of February, twenty twenty five. It's the morning call for Nab. And the US dollar has climbed half a percent today, the DXY is up that much, the Aussie is down by a similar amount, half percent lower to just below sixty one point nine US cents, the Canadian dollar down just naught point two percent today, whereas the Mexican peso bouncing back up on today's news uh that they are off the table for uh uh tariffs at least for the next month, so shares at one point three percent on today's news.
DAC stocks have taken a bit of a hammering though in the United States, the Nasdaq down one point two percent, down two point one per cent at one stage, but finishing down one point two percent. The S P finishes three quarters of a percent lower, naught point three percent down for the Dow, and the Russell two thousand finishes lower by one point three per cent. But European stocks really hit hard on the news that they are likely to be next in the tariff trade war. The DAC's down one point four percent today. Eurostocks 50 down 1.3%, the FTSE 100 down 1%. But you know, remember shares yesterday. We saw bigger falls. The NICI 225 yesterday in Japan down 2.7%. And of course the ASX 200 closed down 1.8% yesterday as well.
So we'll see how that is added to today. Some moves in bond yields, not for 10-year treasuries, though. They haven't really moved today, but down nine basis points for 10-year yields. in Canada, down ten in France as well, down eight basis points in Germany, five basis points low in the UK. Aussie ten years were down five basis points yesterday to four point three eight percent. Now on futures more like four point four two percent so four basis points higher. Oil is higher as well, half percent for WTI up 0.2% for Brent at 7580 a barrel. Gold is up 0.7% as well, bit of a safe haven there. So Ray Atrill joins me today.
How did the tariff delay affect the US dollar, Aussie, and Mexican peso?
From NAB in Sydney. Actually, in some ways the markets seem quite contained given the size of what these tariffs could mean. I guess there is that question, which perhaps has been added to by the news today you know, is there some vain hope that this is just a negotiating tactic and it might not last long? Well that thinking would be in good reason, perhaps, because today we hear that Donald Trump this morning has halted the tariffs on Mexico. Mexico for a month. He says he had a very friendly conversation, according to the US President. And so, yeah, for Mexico, for now, it is a negotiating tactic. So we've seen a bit of a reversal in the markets. Morning, Phil. Welcome to the next four years.
I think that's the uh that's the message of the last twenty-four hours, isn't it, really? Um so you know pretty violent reactions across um you know perhaps less so across uh fixed income than we saw in equities and in in foreign exchange. It was really sort of foreign exchange has moved, I guess, to the epicentre of uh uh of asset market reaction to um to pronouncements from Trump. But um as you say, we were all so For those uh twenty five percent tariffs on uh all Canadian imports, X oil, which he'd reduced to ten percent, twenty five percent on on Mexico, ten percent on China, to come into effect from uh I think it was February the fourth, right? Which is actually about ten hours' time. Um and then we've had this uh supposed friendly phone call between the presidents of Mexico and uh and uh Donald Trump, in which he's agreed a stay of execution for um for a month or so.
Remember if we just wind back to last week, the suggestion was that the twenty five percent tariff announcements would be delayed for until March the first, and then um Trump obviously had a an about uh about
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Chapters
8 chapters
1
Why did President Trump postpone Mexico tariffs for a month?
0:01–2:11
2
How did the tariff delay affect the US dollar, Aussie, and Mexican peso?
2:11–4:27
3
What was the market reaction across equities, bonds and commodities?
4:27–7:40
4
Is the tariff pause a genuine negotiating tactic or a short‑term bluff?
7:40–10:12
5
How is China responding to US tariff threats and the WSJ report?
10:12–13:18
6
What could happen to the Chinese yuan and CNY fixing if tariffs rise?
13:18–15:45
7
How might the Aussie dollar perform over the next six months amid tariff uncertainty?
15:45–18:29
8
What are the broader implications for the EU, Fed and global inflation outlook?
18:29–20:26