Good morning. Things happened in US markets before 4pm yesterday, but who knows what. The White House tariff announcement carried enough punch to erase investors’ short-term memory. Email us with thoughts on the new world: [email protected] and [email protected].

Now it’s war

Historians may one day try to reconstruct how the Trump administration arrived at the tariff rates it announced yesterday. By then, the process will be of merely academic interest. This morning it is of no interest at all. What matters is that the US has struck an almost grotesquely aggressive posture towards its trading partners, leaving those countries — and investors — guessing how long it can hold the pose.

We wrote earlier in the week that the Wall Street consensus for “liberation day” was the average US tariff rate rising to 10-20 per cent, with most analysts in the bottom half of that range. The announced combination of a minimum rate of 10 per cent and much higher rates on specific countries will push the number to the top end of that range and perhaps much higher. Neil Shearing at Capital Economic calculates a 19 per cent average rate; Omair Sharif of Inflation Insights ran the numbers and arrived at an estimate of 25-30 per cent. It is characteristic of the Trump White House that such a consequential announcement would leave room for disagreement about the facts.