Don't bet on Trump to surrender on tariffs

Market pundits and some powerful politicians now believe that President Donald Trump folded his cards on tariffs when he signaled earlier this week that he would unilaterally reduce his tariffs on China and that he is open to compromise on his tariff policies against the global trading partners of the United States.

Many international investors now speculate that countries will just wait Trump out on the matter of tariffs. They have concluded that Trump is bluffing because he has clearly indicated that he wants lower yields on U.S. Treasurys and that he will not accept a plummeting U.S. dollar. Trump now understands that generalized tariffs are terrible economic policy because financial markets are screaming that message.