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Speaker 1: From JMI Wealth Monday morning. Andrew Kellaha, Good morning morning, Mike. Right, tariffs,

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Speaker 1: We've got enough detail here to know what's going to

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Speaker 1: happen or not.

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Speaker 2: We can we can speculate. So we've had terrifaction over

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Speaker 2: the weekend and Trump, as he signaled, tariffs were on

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Speaker 2: the way from Mexico, Canada, China, and that threat has

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Speaker 2: been followed up on. So what's actually happening. Effective Tuesday,

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Speaker 2: US time, the US will impose twenty five percent levy

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Speaker 2: on imports from Canada, Mexico, ten percent tariffs on Chinese imports.

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Speaker 2: Excluded from the twenty five percent tariff on our energy

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Speaker 2: products from Canada, they'll be taxed at ten percent. Now,

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Speaker 2: in case you're wondering how he's done this, these tariffs

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Speaker 2: have been imposed under the Emergency Economic Authority. To the

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Speaker 2: best of my knowledge that this has never been used

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Speaker 2: for tariffs before. Nixon used a precursor to the current

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Speaker 2: law back in nineteen seventy one. So there are no

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Speaker 2: car bouts, there are no exceptions to the tariff. Mike.

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Speaker 2: The duration of the tariffs is important. This will speak

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Speaker 2: to the extent of the economic disruption and the fallout.

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Speaker 2: What we know so far is the tariff will remain

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Speaker 2: in place until the White House is satisfied that illicit

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Speaker 2: fentanyl trafficking into the US is under control and all,

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Speaker 2: and we don't know the mix here. There is a

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Speaker 2: dramatic reduction in the migration and broader criminal activity at

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Speaker 2: the US borders and others. We've got no idea how

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Speaker 2: long this is going to last. Importantly, there is a

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Speaker 2: retaliation clause, so if, as has happened, countries targeted respond

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Speaker 2: with their own tariffs, the US can escalate. So it's

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Speaker 2: potentially these are the only the opening salvos. We don't

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Speaker 2: know where we'll end. My listeners out there need to

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Speaker 2: appreciate in the first term, Trump engaged in a tariff

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Speaker 2: war with China. This move over the weekend dwarfs the

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Speaker 2: extent of that first term action twenty twenty three Trade

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Speaker 2: with China four hundred and nineteen billion US dollars, trade

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Speaker 2: with Mexico four hundred and seventy five billion dollars. I

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Speaker 2: can't verify these numbers at the moment, I've seen them

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Speaker 2: over the weekend, but you're talking one point three to

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Speaker 2: one point five one point six trillion dollars worth of

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Speaker 2: imports will be caught up in these new tariffs, so

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Speaker 2: major economic impact on the US adds to the cost

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Speaker 2: of many sort of household items the one you know,

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Speaker 2: fruit and vegged meat, beer. Even so, Trump is willing

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Speaker 2: to bet a huge economic risk on this. He's referring

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Speaker 2: to it as short term disruption. There's a euphemism. It's hard. Well,

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Speaker 2: it's hard not to see share market weakness initially this week, Mike.

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Speaker 2: How much will it depend on how much investors have

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Speaker 2: actually expected this? And of course the duration very negative

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Speaker 2: for certain industries, automakers in particular those supplying production cycles

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Speaker 2: heavily integrated with the Canada and Mexico. You should see

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Speaker 2: Canadian Mexican currencies under pressure. Now there's a question of

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Speaker 2: whether that weakness flows through the New Zealand as well

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Speaker 2: US inflation that will increase. Again, duration of the dispute

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Speaker 2: is important for New Zealand. It's a reality check, isn't it,

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Speaker 2: Because Trump is basically running roughshod over existing trade agreements

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Speaker 2: that he signed in the first and one thing you

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Speaker 2: have to think about as well, mate, though, if you

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Speaker 2: get import substitution, that could be positive for some exporters

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Speaker 2: to the US. So if you think about the meat,

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Speaker 2: people could now choose New Zealand meat over meat. We

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Speaker 2: don't know, we don't know. But what we do know,

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Speaker 2: Mike is we now have to apply and for as

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Speaker 2: Trump is concerned, a chaos premium to markets.

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Speaker 1: And I think that's true. We're a bit downbeat. We

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Speaker 1: were a bit down beat. We are still a bit downbeat.

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Speaker 1: So those numbers weren't good. That consumer confidence gone backwards.

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Speaker 2: It has This is consumer Confidence led US update on Friday.

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Speaker 2: This is the AZET consumer confidence headline. Confidence fell four

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Speaker 2: points to ninety six, consistent with other surveys where we

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Speaker 2: saw a bit of a This is a bit of

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Speaker 2: a reality check after a jumping confidence at the close

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Speaker 2: of twenty twenty four, significant fall in the proportion of

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Speaker 2: households who think it is a good time to buy

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Speaker 2: a major household item. A and Z refer to that

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Speaker 2: metric as the best retail indicator inflation indicators in the

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Speaker 2: surveys that a little change. Looking at the totality of responses,

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Speaker 2: myke clear definition continues between the here and now and

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Speaker 2: the perception of future. So current conditions fell nine points,

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Speaker 2: but for future conditions that only eased one point. So yeah,

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Speaker 2: we're just getting a little bit less confident mic as

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Speaker 2: the year has started, So just a bit of a

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Speaker 2: reality check that these interest rates are going to take

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Speaker 2: a little.

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Speaker 1: Bit of time to feed through numbers, please.

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Speaker 2: The Dow Jones on Friday fell three quarters percent, closed

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Speaker 2: at forty four thousand, five hundred and forty four. The

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Speaker 2: S and P five hundred fell half percent six oh

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Speaker 2: four oh The Nasdaq fell point two eight percent, closing

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Speaker 2: nineteen thy two hundred and sixty seven forty one hundred

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Speaker 2: per point three eight six seven three. The nicket was

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Speaker 2: uper point one five percent thirty nine thousand, five hundred

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Speaker 2: and seventy two. The Chinese market's still not trading. The

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Speaker 2: A SX two hundred gain to point four five percent

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Speaker 2: eight five three to two, and the endex fifty gain

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Speaker 2: to half percent twelve nine hundred and ninety five now

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Speaker 2: Qi dollar point five six one three. That'll obviously the

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Speaker 2: update when the market starts opening against the US port

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Speaker 2: nine oh four five ozzie point five four three to

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Speaker 2: euro zero point four five two six pounds eighty seven

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Speaker 2: point one agether against japanyez en. Yes, you're right, Mic,

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Speaker 2: Gold Gold went up settled just under twenty one hundred,

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Speaker 2: mark twenty seven nine eight and brankrud lower seventy five

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Speaker 2: dollars and sixty seven MS.

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Speaker 1: Appreciate it. Andrew kelleherjmiwealth dot co dot m Z. For

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