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
~3 min read
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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
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As we have said, we expect volatility with an opportunity to trade it.
As we saw in Trump's first term, trading these headlines CAN be very profitable.
Want to see how we are trading it?
Subscribe to our premium analysis and alerts at the link below:
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As we saw in Trump's first term, trading these headlines CAN be very profitable.
Want to see how we are trading it?
Subscribe to our premium analysis and alerts at the link below:
thekobeissiletter.com/subscribe
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Overall, the US relies on trade SIGNIFICANTLY less than its allies do.
For example, trade in goods and services reflect ~85% of Germany's GDP and ~65% of the UK's GDP.
On the other hand, trade in goods and services impact less than 30% of US GDP.
This gives Trump an "edge."
For example, trade in goods and services reflect ~85% of Germany's GDP and ~65% of the UK's GDP.
On the other hand, trade in goods and services impact less than 30% of US GDP.
This gives Trump an "edge."
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New tariffs from President Trump are set to impact $1.3 TRILLION worth of US trade.
This marks the biggest tariff hike since the Great Depression, with rates set to break above 20%.
Are you ready for it?
Follow us @KobeissiLetter for real time analysis as this develops.
This marks the biggest tariff hike since the Great Depression, with rates set to break above 20%.
Are you ready for it?
Follow us @KobeissiLetter for real time analysis as this develops.