A LOT happened last night: As of 12:01 AM ET, largest US tariff...
The Kobeissi Letter@KobeissiLetter
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Mar 04, 2025
~2 min read
1
A LOT happened last night:
As of 12:01 AM ET, largest US tariff hike since 1930 went LIVE and China has announced 15% retaliatory tariffs.
The S&P 500 and crypto are now extending 2-day losses to a massive -$2 TRILLION.
Here's what you need to know today.
(a thread)
As of 12:01 AM ET, largest US tariff hike since 1930 went LIVE and China has announced 15% retaliatory tariffs.
The S&P 500 and crypto are now extending 2-day losses to a massive -$2 TRILLION.
Here's what you need to know today.
(a thread)
2
The US officially placed blanket 25% tariffs on both Canada and Mexico last night.
This comes 1 month AFTER these tariffs were delayed on a "deal" with President Trump.
China's tariffs have also doubled from 10% to 20% as Trump ramps up pressure and the global trade war.
This comes 1 month AFTER these tariffs were delayed on a "deal" with President Trump.
China's tariffs have also doubled from 10% to 20% as Trump ramps up pressure and the global trade war.
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At a high level, these tariffs function like a TAX on goods coming into the U.S.
Simply put, $100 of goods coming into the U.S. from Canada/Mexico will now "cost" $125.
The US imported $910 BILLION from Canada/Mexico in 2023.
Many of these goods will cost 25% more to import.
Simply put, $100 of goods coming into the U.S. from Canada/Mexico will now "cost" $125.
The US imported $910 BILLION from Canada/Mexico in 2023.
Many of these goods will cost 25% more to import.
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Immediately after the US tariffs went live, Canada's retaliatory tariffs hit.
Canada has now imposed 25% tariffs against $155 billion of US goods, beginning with $30 billion effective immediately.
The remaining $125 billion will be live over the next 21 days.
Canada has now imposed 25% tariffs against $155 billion of US goods, beginning with $30 billion effective immediately.
The remaining $125 billion will be live over the next 21 days.
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Minutes later, at 12:37 AM ET, China announced further retaliatory tariffs against the US.
China is now imposing tariffs of up to 15% on goods that largely come from the US agricultural sector.
This includes corn and soybeans, which will be subject to 15% and 10% tariffs.
China is now imposing tariffs of up to 15% on goods that largely come from the US agricultural sector.
This includes corn and soybeans, which will be subject to 15% and 10% tariffs.
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To put this into perspective:
~40% of ALL US imports come from China, Canada, and Mexico.
Auto industry imports from Canada and Mexico total $80 billion per year.
$97 billion of crude oil comes from Canada each year, and $55 billion in phones come from China to the US.
~40% of ALL US imports come from China, Canada, and Mexico.
Auto industry imports from Canada and Mexico total $80 billion per year.
$97 billion of crude oil comes from Canada each year, and $55 billion in phones come from China to the US.
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Meanwhile, crypto markets are extending their losses.
Since Sunday at 8:00 PM ET, crypto's market cap has fallen from $3.11 trillion to $2.69 trillion.
That's -$420 billion in market cap in ~36 hours.
Crypto now trades $100 billion BELOW pre-reserve announcement levels.
Since Sunday at 8:00 PM ET, crypto's market cap has fallen from $3.11 trillion to $2.69 trillion.
That's -$420 billion in market cap in ~36 hours.
Crypto now trades $100 billion BELOW pre-reserve announcement levels.
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The ONLY safe haven that is surging now is gold.
Take a look at the large gap between gold's performance and Bitcoin since the trade war escalated.
While Bitcoin is down -12%, gold prices are up over +1% for their second straight day.
There's ALWAYS a bull market somewhere.
Take a look at the large gap between gold's performance and Bitcoin since the trade war escalated.
While Bitcoin is down -12%, gold prices are up over +1% for their second straight day.
There's ALWAYS a bull market somewhere.
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Sum it all up, and we now have:
1. 25% tariffs on goods from Mexico to US
2. 25% tariffs goods except energy from Canada to US
3. 20% tariffs on many goods from China to US
4. 10% tariffs on energy from Canada to US
5. 25% retaliatory tariffs on $155B of goods from US to Canada
6. 10%-15% retaliatory tariffs on goods from US to China
1. 25% tariffs on goods from Mexico to US
2. 25% tariffs goods except energy from Canada to US
3. 20% tariffs on many goods from China to US
4. 10% tariffs on energy from Canada to US
5. 25% retaliatory tariffs on $155B of goods from US to Canada
6. 10%-15% retaliatory tariffs on goods from US to China