Global imports of goods in the US for 2016

If the new Administration's policy continue to work for protectionism and border tax, this will have negative impact on the USD. The biggest partners of the country are China, Canada and Mexico, and that's why the President has targeted them.

With lowering the import, the consumption of local manufacturing will be bigger, however it will be more pricier and it will effect negatively the common consumption in the country. On the other hand there's the chance for a higher inflation because of the higher prices for goods, purchased from the consumers. The biggest positive factor, which Trump wants to make real is to bring back the manufacturing inside the country and create more high payed jobs, which will support the growth of the economy.

The main factors that Fed are focused on to measure the state of the economy are the levels of unemployment and the CPI. The factor that may rise is the inflation. With the protectionism and the border tax, it is highly possible to see the greenback even lower and new record levels on the stock markets. The weaker dollar will be a benefit on the export of the country.

Source: Bloomberg Pro Terminal

Senan Fuchedzhiev - Trader

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