It is being reported that the current discussions are for tariffs to be applied to all countries but to only cover critical imports. The tariffs will only be on certain sectors deemed critical to national or economic security, according to the report.

The dollar has fallen on the headlines here with USD/JPY stumbling from 157.80 to 157.40 currently. Meanwhile, EUR/USD is now up nearly 1% on the day to 1.0407 at the moment.

I want to say that there is some cachet to this line of thinking. But realistically, do you think Trump will talk up such a small game after having gone big with all his threats since last year? Even the latest round of tweets here don’t seem to suggest that.

As such, I wouldn’t be surprised if he does sort of deny or overwrite whatever the report here is saying in due time. As for when the tariffs do get implemented, whether or not they do walk the walk, that’s a different matter. For now, it’s all about the conceptualisation of it.

This article was written by Justin Low at www.forexlive.com.