Lopez Obrador comments:
- Officials will meet with US side on Wednesday
- Encouraged by US willingness to have dialogue over trade dispute
- Crisis in Central America is very severe
- He is confident there will be a deal in US talks
- We believe it won't be necessary to resort to legal measures
- We have not given up the right to seek international arbitration
- Chances of no deal are only a remote possibility
- The USMCA deal will be ratified
This strongly points to the idea that it's all theater and that Trump is just trying to flex his muscles and make headlines that please his base. So the question is: How much of Friday's rout reverses? Especially in bonds where the breakdown in yields?
I expect more than half of it to come back some time between now and the June 10 deadline but the move does illustrate once again that Trump is willing to threaten to use tariffs whenever he feels like it. That's the kind of move that can be miscalculated and lead to a trade war.
