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Lots of little lists

| Posted by: Paul Donovan | Tags: Paul Donovan

  • As some day it might happen that a tariff must be found; Trump has a little list, Trump has a little list; Of things bought by Americans, to be taxed into the ground; And which never would be missed, which never would be missed. (Apologies to Gilbert and Sullivan)
  • US President Trump's little list is of consumer taxes on USD 50bn of goods partially made in China. Charging US consumers a 25% tax will not yield USD 12.5bn of tax revenue. It is unlikely to yield more than USD 4bn. Companies can avoid such taxes, not least because we are no longer living in the year 1840 and tariffs are supremely ill-suited to the year 2018.
  • ECB President Draghi's little list is of quantitative stimulus that will surely not be missed. The ECB's statement (aside from the forward guidance on rates) was basically what markets were looking for. The ECB president's comments spun away from the meaning of the statement with the speed of a Highland reel.
  • UK PM May's little list is of rebellious back benchers whose votes may well be missed. Another stage in the interminably tedious EU divorce process looms, with the government's ability to muster a majority called into question again.