What Trump's New Tariffs Mean for China, US Congress, Dollar | The Pulse 2/23
Speakers
Summary
- Tariff Chaos & The Dollar: The Supreme Court ruling against Trump's reciprocal tariffs has led to a chaotic policy response (boosting tariffs to 15% from 10%). Counter-intuitively, this uncertainty is driving the US Dollar down. Strategists argue that while tariffs are usually USD-positive, the legal and administrative chaos is dampening sentiment, while the Euro benefits from a current account surplus.
- German Economy on Life Support: Germany is showing signs of life, but it is entirely driven by domestic fiscal stimulus. Private investment and exports remain weak, making the recovery fragile and dependent on government spending.
- Estée Lauder Turnaround: Despite macro headwinds, EL is executing a turnaround, posting sales growth for the first time in three years. Their strategy of localized manufacturing (5 plants in NA, 3 in EU, 1 in Asia) acts as a natural hedge against the new tariff regime.
- Iran/Oil Asymmetry: The market is pricing in a successful deal in Geneva. However, Trump is threatening military strikes if no deal is reached. With Iran's high pain threshold and the US deploying massive military assets, the risk of a kinetic event (and oil spike) is underpriced.
Trade Ideas
Oil markets are stable/welcoming the prospect of a deal. Trump wants a deal to avoid an oil price spike before midterms. The asymmetry is stark. The "Deal" outcome is priced in (flat oil). The "No Deal/Strike" outcome (massive spike) is not. Iran may try to drag out negotiations, but Trump has set a hard deadline. Long Oil Volatility or Call Options ahead of Thursday's talks. A quick deal suppresses oil prices to help the US consumer.
Ven Ram
Markets Live Reporter/Strategist, Bloomberg
Trump is threatening limited military strikes on Iran if nuclear talks in Geneva fail this week. The US has its largest military deployment in the region since 2003. Gold has been consolidating. Ven Ram argues it lacks short-term momentum *unless* geopolitical tension spikes. The market is currently complacent, expecting a deal. If talks collapse on Thursday, the flight to safety will bid up Gold immediately. Long Gold as a hedge against diplomatic failure. A surprise comprehensive deal between the US and Iran would drain geopolitical premium.
Hugh Gimber
Global Market Strategist, JPMorgan Asset Management
The Supreme Court struck down the reciprocal tariff mechanism, leading Trump to haphazardly boost tariffs to 15%. Ven Ram notes the US trade deficit is at multi-decade highs, while the Eurozone has a current account surplus. Typically, tariffs strengthen the domestic currency (import compression). However, the *uncertainty* of the policy (150-day windows, legal challenges, refund chaos) is acting as a risk premium on US assets. The market is punishing the chaos rather than rewarding the protectionism. Bearish USD / Bullish EUR. If EURUSD hits 1.20, the ECB may be forced to cut rates aggressively to protect European exporters, reversing the trend.
Lionel Laurent
Journalist, Bloomberg News
A massive winter storm has shut down major airports across the US East Coast (NY, Boston). Thousands of flight cancellations lead to immediate revenue loss and increased operational costs (rebooking, staffing) for airlines. This is a classic short-term weather trade. Tactical Short on US Airlines. Weather clears faster than expected; market looks through temporary weather events.
Stephane de La Faverie
CEO, Estée Lauder Companies
Estée Lauder posted 4% sales growth (first time in 3 years). They have a diversified manufacturing footprint: 5 sites in North America, 3 in Europe, 1 in Japan. The market is indiscriminately selling consumer goods stocks on tariff fears. However, EL's "produce where you sell" strategy insulates them from cross-border tariffs better than peers who manufacture centrally and export. Additionally, strong growth in China skincare suggests the turnaround is working despite macro headwinds. Long EL as a tariff-resilient turnaround play. Continued weakness in US consumer confidence or a total collapse in Chinese luxury spending.
Clemens Fuest
President, Ifo Institute
German growth is returning, but Fuest explicitly states it is driven *only* by public sector demand (fiscal stimulus). Private investment and exports are lagging. A recovery built solely on government spending is low-quality and unsustainable, especially with a looming trade war (US is 10% of German exports). The "signs of life" are a fiscal mirage, not organic business growth. Avoid German Industrials/Exporters; the macro foundation is weak. If the fiscal stimulus successfully jumpstarts private confidence (unlikely given tariff uncertainty).
Up Next
This Bloomberg Markets video, published February 23, 2026, features Paul Wallace, Ven Ram, Hugh Gimber, Lionel Laurent, Stephane de La Faverie, Clemens Fuest discussing WTI, GLD, FXE, EURUSD, JETS, AAL, UAL, DAL, EL, EWG, DAX. 6 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Paul Wallace, Ven Ram, Hugh Gimber, Lionel Laurent, Stephane de La Faverie, Clemens Fuest · Tickers: WTI, GLD, FXE, EURUSD, JETS, AAL, UAL, DAL, EL, EWG, DAX