Daily Commentary

MarketMinder’s View: While US President Donald Trump suspended tariffs slapped on Canada and Mexico over the weekend after talks Monday, the 10% across the board tariff he announced on Chinese imports stands. And so, China has responded with tariffs of its own. But as this article notes, the reach of the tit-for-tat move is extremely limited. “China’s two new tariff lists affect goods from the US that totaled $13.9 billion in 2024. Among those items, $9.5 billion of products including crude oil, tractors and functional vehicles will be subject to 10% additional levies, while $4.4 billion of goods — coal and liquefied natural gas — will face an extra 15% tax.” In addition, China announced a few export restrictions on goods like tungsten and some company-specific moves including blacklisting a couple minor US companies and an antitrust investigation of one large Internet search firm that rhymes with shmoogle … which hasn’t operated in China in more than a decade. (And we remind you here that MarketMinder doesn’t make individual security recommendations—any mention herein is incidental to our higher-level interest.) Ultimately, we agree with the takes in this piece that the response likely has muted effects at most and leaves a lot of room for negotiation. Which, as Monday highlights, seems to be what Trump’s tariffs are really all about. For more, see Monday’s commentary, “The Trump Tariff Turnabout.”

MarketMinder’s View: First, please note that MarketMinder favors no party nor any politician nor any adviser to any politician. We assess developments solely for their potential market and/or economic effects. This article is a fair look at the Department of Government Efficiency a couple weeks into the new administration. Trump did make it an actual part of the government by issuing an executive order that reclassified a previously existing technology-related body. But it still has no official powers to do things like fire people or cut spending, as this article makes clear. It is an advisory body and, so long as its activities are limited to consulting on potential legislation, orders or other actions, it is in the clear. But this also notes areas where lawsuits and pushback could be coming—and the grounds for them. Those efforts haven’t gained much steam yet, but they could going forward. Regardless, the idea this body would cut spending by $2 trillion or vastly revise how government operates likely goes too far. The economic effects of DOGE don’t appear nearly as big as some hope and others fear as a result. For our coverage that predates inauguration, see January 16’s “Reality Dogs the DOGE.”

MarketMinder’s View: France’s budget drama is set to return to headlines this week, as Prime Minister Francois Bayrou attempts to enact his budget—which aims to appease opposition parties’ concerns over too much austerity. After similar theatrics sank his predecessor, uncertainty over Bayrou’s staying power has some investors on edge. But that uncertainty should fall this week, after Bayrou circumvented Parliament to end debate over the budget by invoking the constitution’s controversial Article 49.3. “Bayrou triggered the measure, Article 49.3 of the constitution, twice on Monday. The prime minister will employ the same maneuver twice more in the next week to pass all the remaining parts of the budget, according to a lawmaker from Bayrou’s camp. Opposition lawmakers will then have four separate opportunities to topple the government for a second time in less than two months, after having brought down former Prime Minister Michel Barnier in December over his spending plans.” So stay tuned here, but it appears we could get much more clarity in France in the coming days. For more, see our December 13 commentary, “Northern Europe’s Persistent Political Fog.”