President Donald Trump is set to announce tariffs on Wednesday in his “Liberation Day” event. It’s unknown what tariffs the President plans to introduce, but a likely choice is a 20% tariff on all imports. This plan was floated by insiders yesterday, but they weren’t sure of Trump’s final decision.
One person who does know what the President will do on Wednesday is Trump himself. The President confirmed today that he’s settled on a tariff plan for Liberation Day. However, Trump has refused to say what tariff option he went with in the U.S.’s trade war with the rest of the world.
Trump’s Other Tariff Option
There are arguments that Trump might skip the universal 20% tariff in favor of those that target countries with which the U.S. is caught in a trade war. This would be in line with previous actions while also providing the President with more bargaining power with select countries, one of the key reasons for the tariffs.
There’s also been talk that President Trump will favor the universal tariff to generate more revenue. The President has floated this idea as a way to provide U.S. taxpayers with an additional tax break, a tax dividend, or a refund.
What Does This Mean for the Stock Market?
Investors are still worried about the state of the U.S. economy due to the ongoing trade war, and more tariffs don’t help with that. This even resulted in Goldman Sachs lowering its targets for the S&P 500 (SPX) as it expects additional volatility.
With these warnings in place, investors are betting on safe-haven investments, such as gold. This has caused gold prices to soar recently. It’s also having a positive effect on gold mining stocks, such as Barrick Gold (GOLD), which is up 26.15% year-to-date. GOLD stock has a consensus Strong Buy rating and an average price target of $23.34, representing a potential 20.06% upside.
