US President Trump recently commented on non-tariff barriers via Truth Social. He listed issues including currency manipulation, VATs acting as tariffs, below-cost dumping, and protective agricultural standards among others.
The US traditionally addresses currency manipulation but did not act on it during Trump’s previous term, even with cases like the Swiss franc. The mention of VATs is problematic since many major economies have them, with most US states levying sales taxes.
Focus On Non Tariff Barriers
Trump suggested there might be specific VAT-related issues they are targeting, though details are unclear. In terms of trade, the focus on non-tariff barriers complicates negotiations, as changes often require local agreements.
These barriers are essential for government revenue. This stance from Trump could be influencing market movements, as the US dollar weakens and S&P 500 futures drop by 0.6%. It’s unclear if this is the main cause, but it serves as another reminder of a stance that markets may find unreliable.
Previously, Trump made remarks online that pointed toward a harder stance on trade. He touched on issues beyond traditional tariffs—things like currency policies and tax systems that can have the same effect as tariffs without being labelled as such. His comments seem to revive older debates about how trade works in practice, not just on paper.
It’s worth noting that during his prior time in office, though currency manipulation was talked about, it wasn’t followed with direct policy moves. There were episodes—for instance, the movements of some European currencies—where action might have been expected, but it wasn’t taken. Now, by bringing up things like value-added taxes—which are used in most developed countries—he prompts renewed discussion on how the US views fairness in trade. The difficulty is that these systems are deeply integrated locally, and any attempt to address them from outside is unlikely to be straightforward.
Market Positioning And Price Movements
Traders would have likely seen the short-term effects already. The dollar has softened. Equity futures dipped, not sharply but visibly. On their own, these changes aren’t out of the ordinary; however, taken with the tone of Trump’s post, they feed a pattern. Not all of the price action can be pinned to his statements—but sharp positions taken during U.S. morning hours usually imply investor unease rather than coincidence.
From our perspective, these developments argue for caution. We aren’t seeing signs of panic—that’s clear—but the price reaction aligns enough with the tone shift that it becomes impractical to ignore it. We will be watching whether this is the start of a clearer theme or another instance where early signals were simply traded against later in the week. Traders exposed to moves in futures or major FX pairs should widen their tracking range, taking into account that the US administration’s tone may shift swiftly following public comments.
Powell’s next appearance is unlikely to address trade, yet any correlation with fiscal stances, or if markets start hearing echoes of trade risk in rate expectations, could lead pricing behaviour to change faster than central banks would prefer. It’s also time to notice positioning: a heavier tilt in long positions in tech or single-country sovereign debt—especially where exposure to dollar strength is baked in—might prove more volatile than previously thought.
We’re preparing to act as needed, adjusting hedges accordingly and noting where leading metrics—especially yield spreads linked to FX sensitivities—start to move. It’s in this chart movement, not necessarily the headlines, that the next shifts may appear.
