Mid-Week Tariff Tension Updates
Stock markets should hold on to a rally that started after the Liberation Day lows. On Tuesday, U.S. and China officials agreed to a preliminary plan.
The two superpowers will alleviate trade tensions. In a meeting that took place in London, the two sides had a framework for implementing agreements made in Geneva. The next step involves delegates presenting the proposal to their superiors.
Gold prices moderated (GLD) in response to the developments. The U.S. dollar edged higher. Although oil prices may have influenced those prices, lower trade tensions will help stock markets.
The U.S. and Mexico are working on an agreement for tariffs on steel imports. It would see the U.S. remove the 50% tariff on them, up to a certain volume. Still, Mexico will lose out on General Motors (GM). The automotive firm plans to invest $4 billion in plants in the U.S. That way, GM would not be subject to tariffs on products made at two of its Mexican plants.
GM will shift the assembly of the Chevy Blazer and Equinox from Mexico to the U.S. Currently, the company idled the plant in Michigan.
The news validates Trump’s Build in America mandate. GM stock is in an uptrend, rising by 25.59% from a 52-week low reached in April. Ford Motor (F) traded higher while Stellantis (STLA) continued its three-month uptrend.
