The currencies of the NAFTA nations, loonie and peso, spiked after sliding overnight following Trump’s announcement of solar and washing machine tariffs – after Trump offered some clarification comments on what many assumed was the first shot in a trade war deal, telling reporters in the Oval office that “Nafta talks are moving along pretty well.”
“I happen to be of the opinion that if it doesn’t work out we’ll terminate it, but I think you’re doing pretty well, Bob,” Trump added, referring to U.S. Trade Representative Robert Lighthizer.
“We’re renegotiating our deal with South Korea, which has turned out to be a disaster for this country.”
That alone was enough to send a bid behind the peso and loonie.
Trump spoke during the signing of the new executive orders to impose tariffs on imported washing machines and solar products, announced on Monday and which sent shockwaves across EM currencies, which have promptly rebounded on what appears to be a modest conciliation by the president.
With Bloomberg also quoting Trump as reminding that he is looking at potential tariffs for both steel and aluminum, Reuters adds that Trump does not expect a trade war to result from any new tariffs and notes that his upcoming “special address” in Davos will be about investing in the US.