Goldman Sachs and U.S. Indexes Rebound as Republicans Pressure Trump to Rethink Tariffs
Shares of Goldman Sachs Group Inc. (NYSE:GS) were up 1.8% in early afternoon trading on March 5. The Dow Jones Industrial Average was up over 200 points after falling in the early morning. Last week the Trump administration announced that it would proceed with tariffs on steel and aluminum imports of 25% and 10%, respectively. Over the weekend, administration officials also suggested that there would be no exemptions, even for close U.S. allies.
Goldman Sachs veteran and chief economic advisor Gary Cohn was reportedly opposed to the proposed tariffs. U.S. Treasury Secretary Steven Mnuchin, considered a moderate on trade, is also reported to be in his camp. Paul Ryan, the Speaker of the House of Representatives also urged Trump not to proceed with steel and aluminum tariffs. Ryan and other Republicans have cited the numerous risks to the U.S. and global economy were the tariffs to be imposed, as many experts and analysts warn that a trade war could erupt in response.
On Monday, Trump stated that Canada would be exempt from tariffs if it entered into a new and “fair” NAFTA deal. This comes after bitter negotiations had improved in recent weeks, but this new negotiating tactic is unlikely to warm the trade relationship. North American countries appear to be moving closer, and though the negotiations are expected to extend for a long period of time this may give Mexico and Canada increased urgency.
Investors should be prepared for a volatile trading week as an internal battle continues to wage in the U.S. over the implementation of these tariffs.