The firm says their model estimates that if Trump’s tariffs are to be sustained, the impact will be large enough to throw the Canadian and Mexican economy into recession. That’s the pain trade that is getting markets all riled up to start the week. In case you missed it: White House says Trump has signed order to impose tariffs on Canada, Mexico and China
Meanwhile, Morgan Stanley also argues that their base case for the Mexican economy will shift towards being a recession if Trump does indeed stay the course on tariffs. As a reminder, the signed tariffs will only start to go into effect on 4 February.
This article was written by Justin Low at www.forexlive.com.
