The other Trump trade

Investors and policymakers are getting a dose of Trumponomics déjà vu this morning.

Global stocks are falling, and the dollar is climbing. The volatility comes after President-elect Donald Trump’s vow to impose tariffs on the United States’ biggest trading partners — Canada, China and Mexico — on Day 1 in office in an apparent effort to clamp down on the flow of cross-border drugs, like fentanyl, and migrants.

The latest:

Trump wants to impose 25 percent tariffs on Canada and Mexico “on ALL products coming into the United States,” he said on Truth Social. He also wants an “additional” 10 percent tariff on imports from China, which Trump blames for the fentanyl crisis, a charge that Beijing has repeatedly disputed.

The Canadian dollar and Mexican peso fell sharply against the dollar.

Europe, Japan and South Korea weren’t even mentioned in Trump’s announcement, but stocks have fallen there, too. That suggests rising fears that a new trade war could scramble global supply chains and dent profits.

Automakers are some of the hardest hit stocks, with Volkswagen, Stellantis and Nissan, which run manufacturing operations in Mexico, all down.

Today’s losses have reversed some of yesterday’s “Bessent bounce” rally. Investors were relieved after Trump picked Scott Bessent, the market-friendly hedge fund mogul, to run the Treasury Department.

But the reverberations show that it’s Trump calling the shots. The president-elect has made no secret of his desire to use tariffs to further his America-first agenda, and he has yet to announce his pick to be U.S. Trade Representative. (Another tariff supporter, Robert Lighthizer, is in the running.)