Tariffs, trade policy & market impact
Updates on tariff announcements, trade negotiations and their effects on FX, commodities and risk assets.
Yesterday I wrote an article explaining why US tariffs on Europe mean more expensive gold and cheaper US dollar
Today, gold hit a new all time high & you should expect this trend to continue
If you haven't read the article yet, you can do it here: https://illya.sh/threads/good-for-gold-bad-for-usd-us-tariffs-on-europe
Every day it becomes more obvious how US tariffs, unilateral sanctions & multi-faceted geopolitical aggression including towards its allies and major trade partners is a strategic mistake
Expect this trend to continue throughout 2026
China Is Hoarding Commodities
While the U.S. is pumping a crypto & AI bubble, China is pumping their commodity reserves.
Not only PRC is limiting silver exports, but they're also lowering the cost of commodity-related imports.
The net result will be more positive commodity import/export ratio, i.e. more physical commodities within China, which will be used for strategic and industrial needs (China is the world's number one producer).
It also means that there will be less commodities available outside of PRC, and since the global demand won't decrease - that's further positive price pressure on the commodity sector.
I have been writing about gold, silver and other commodities for over 2 years. The same bullish narrative remains valid. These geopolitical developments provide further confirmation.
no, the U.S. will not pay off its debt with tariffs
i think this is obvious for everyone now. if not - go read my past posts
the vast majority, if not all of tariffs set be the US will be removed in the next 4 years
latest - by the next US administration. it will be an easy way to mitigate price inflation a bit, and mobilize the overall US economy
tariffs are a net negative - i've said it from the very start. it's a lot more obvious now
demand is created legal/regulatory environment and open market forces
legal/regulatory environment includes international bilateral agreements and national laws
open market forces influence the evaluation of USD against other currencies and assets
USD is the world's reserve currency, but what does that mean?
for USD to be a reserve currency it must dominate in:
1️⃣ USD-denominated credit issuance (demand)
2️⃣ USD use a means of settlement for payments (liquidity)
this dominance must be at least relative to alternatives
gold tariffs have been cancelled - just like I wrote in my thread on Friday (link below)
you can read about the gold tariffs, their impact on the market and why they were likely to get removed here
👇
https://illya.sh/threads/@1754662712-1.html
it's official: gold tariffs have been cancelled - just like I wrote last Friday 😄
in fact, rumors started less than 30 mins after i wrote the previous post in the thread - and the full removal of tariffs on gold has been confirmed just now
gold tariffs are unlikely to stay for a long period of time
expect them to be removed and/or heavily reduced soon
just the fact that they happened adds longer-term upside pressure on its price
of course, the markets will be volatile 😄
i wrote a thread about the rumored tariffs on gold and what that means for the gold price
also what's coming next
you can read the thread here ⬇️
https://illya.sh/threads/@1754662712-1.html
gold tariffs put further upside pressure for gold towards a new all time high on spot
this is in addition to the global monetary, geopolitical and fiscal positive price pressures
a significant part of the markets will be closed for the weekend. there could be a gap on reopen
🚀 gold futures NEW all time high above $3500
futures price is usually above spot. today's increase was caused by tariffs on gold used in COMEX & CME. i wrote a thread about that today
i will keep this thread active at least until the spot price reaches a new ATH 😄
gold tariffs are unlikely to stay for a long period of time
expect them to be removed and/or heavily reduced soon
just the fact that they happened adds longer-term upside pressure on its price
of course, the markets will be volatile 😄
the tariffs are not on all gold imports - just on a specific configuration - 100oz/1kg bars
this alone won't skyrocket the price of gold, but it adds to the existing breakout pressure
the tariffs are not on all gold imports - just on a specific configuration - 100oz/1kg bars
this alone won't skyrocket the price of gold, but it adds to the existing breakout pressure
tariffs on gold decentivize gold imports
higher import tax is a disincentive. not sure what' the benefit to having less gold come into US
there's plenty of buyers in Asia who will happily take it. soon you will see more central banks expanding their balance sheets with gold
tariffs on gold decentivize gold imports
higher import tax is a disincentive. not sure what' the benefit to having less gold come into US
there's plenty of buyers in Asia who will happily take it. soon you will see more central banks expanding their balance sheets with gold
when you see gold hitting a new all time high very soon - just remember that it wasn't caused by a single event
gold has a growing buying pressure for monetary, geopolitical and fiscal reasons
I've written about it in depth, so search through my post history if interested
it's mostly 100oz/1kg gold bullion markers that will be affected - so you're looking at futures
expect a larger basis trade (futures price higher than spot), which will eventually close down
with tariffs in place spot is being pushed up towards futures
gold tariffs means more upside price pressure
US tariffs don't apply to all gold imports - only to 100 oz and 1 kg bullion bars, which are mostly used for CME/COMEX futures
400 oz London Good Delivery bars are tariff-free - those are used by dealers, central banks and ETFs
gold tariffs means more upside price pressure
US tariffs don't apply to all gold imports - only to 100 oz and 1 kg bullion bars, which are mostly used for CME/COMEX futures
400 oz London Good Delivery bars are tariff-free - those are used by dealers, central banks and ETFs
🇺🇸🇮🇳 US imports for India account for mere 2.7% of its total imports - only $87 billion
you can see how selective and small the tariff applications are - and even those will eventually be dropped
nothing about China 🇨🇳 👀
fully consistent with what I wrote 2 weeks ago
i understand that these are secondary tariffs, but there is a grand total of 0% chance of that going in action for any substancial amount of time
🇨🇳 China is Russia's main trading partner. do you really think the US economy can sustain 100% tariffs on their main import source?
🇺🇸🤝🇨🇳 US/China tariffs paused for another 90 days
if you read my post from two weeks ago - this isn't a surprise to you
once again - the US is dependent on China financially, economically & infrastructurally
threats of 100% tariffs against Russia will NOT materialize 🇷🇺
i understand that these are secondary tariffs, but there is a grand total of 0% chance of that going in action for any substancial amount of time
🇨🇳 China is Russia's main trading partner. do you really think the US economy can sustain 100% tariffs on their main import source?
i understand that these are secondary tariffs, but there is a grand total of 0% chance of that going in action for any substancial amount of time
🇨🇳 China is Russia's main trading partner. do you really think the US economy can sustain 100% tariffs on their main import source?
a reminder that Russia doesn't trade with USA anymore 🇺🇸🤝🇷🇺
so it's not clear what 100% or 9999% tariffs on Russia will achieve
Russia's been offloading US securities for gold since 2018
Russia's exports to the US are less than 1% of the total
a reminder that Russia doesn't trade with USA anymore 🇺🇸🤝🇷🇺
so it's not clear what 100% or 9999% tariffs on Russia will achieve
Russia's been offloading US securities for gold since 2018
Russia's exports to the US are less than 1% of the total
🇷🇺 Russia is immune to US tariffs
Russia's international reserves are as follows:
- 0.007% US Treasury bonds
- 35% Gold
Russia exports <1% to the US. Russia is a net exporter
This makes them protected from US sovereign risk (USD devaluation) & trade risk
🇺🇸🇨🇳This makes no sense:
1️⃣ USA gets themselves into a net importer, 130% debt to GDP & higher refinancing costs
2️⃣ 🇺🇸 became so dependent on China, that 🇺🇸 economy can't survive with the tariffs
3️⃣ Now, the (not so good) student is lecturing the teacher?
Why would 🇨🇳 listen?
🇺🇸🇨🇳Here's why trade war with China will hurt the US
The economic relationship between US & China is:
1️⃣US pays USD for Chinese goods
2️⃣China re-invests USD back into US bonds
Thus, the same USD comes back to US!
Tariffs = less imports = less US bond investment = higher yield
🇺🇸 USD index bearish/in a downtrend
5Y timeframe weekly chart shows lower highs & lows
Ever since Trump took office, every $DXY weekly candle has been red
Greatest USD economy in history 🫠
🇺🇸🇷🇺 USD is TANKING against Ruble
… on a daily basis 😳
It's only partially tariffs. This has been a trend even prior to them
Russia loaded up on Gold & sold off their US securities. Trade with US is negligible
Russia self-administered an immunity shot
Grok summarized US tariffs effect very well
As well as what will happen to the US economy, and by extension, US Dollar - the most important currency in the world
It gets crazier 🤯
In the past 3 months, amids the tariff madness - at the time of rush into safe assets - Ruble & Gold head-to-head
You could've either bought gold or Ruble & gained 18% in both cases
And buying ruble isn't easy due to sanctions. Imagine when it opens up
