The US dollar is softening today in part due to a Washington Post report that says Trump is considering global tariffs, but only on ‘critical materials’.

The report includes a relatively short list highlighting three areas and 11 specific items:

Defense industrial supply chain:

Critical Medical Supplies:

• Syringes
• Needles
• Bottles
• Pharmaceutical materials

Energy production:

• Batteries
• Rare earth minerals
• Solar panels

It is a fleetingly small part of global trade and total US imports. If it is a list, it would not cause a domestic inflation problem and force the Fed to keep rates higher for longer.

Over the weekend, Trump also unveiled a major bill with all of his border priorities and an extension of corporate tax cuts. He said it would be paid for through tariffs, but this tariff plan would raise minimal amounts of money, and even full global tariffs at high rates would not cover the corporate tax cuts.

Regarding the separate tariffs that Trump has threatened against Mexico, Canada and China, the Washington Post writes:

Many business leaders believe the measures are unlikely to ever come into effect, but some people familiar with the matter said they could be imposed alongside universal tariffs on key sectors.

I imagine there will be a lot of threats.

But to me, this all looks bearish and positive for risk assets, as corporate tax cuts, not trade or the deficit, appear to be Trump’s priorities.