Trump announced plans to impose tariffs between 15% and 50% on certain countries. He emphasized that these tariffs would be simple and easy to understand. Ongoing discussions with the European Union aim to reduce tariffs if they allow more access for U.S. businesses.

Progress With China

Trump noted progress in negotiations with China. Most other countries are expected to face these tariffs. He is also working on lowering oil prices and is involved in energy agreements with several Asian countries. More information will be shared soon. We expect increased market volatility due to Trump’s comments about these broad tariffs. In the past, the CBOE Volatility Index (VIX) spiked above 20 several times during the trade disputes of 2019, so we should be ready for similar fluctuations. Traders might want to buy call options on the VIX or put options on major indices to protect against possible declines. The serious talks with the European Union create uncertainty for transatlantic stocks. With over $1.3 trillion in annual trade at risk, any new tariffs could greatly affect German automakers and U.S. industrials. We see potential in buying straddles or strangles on ETFs that track the DAX index to benefit from large price swings, no matter the direction.

Deal With China And Impact On Oil Prices

Finalizing a deal with China could be a big positive event, but any setbacks might hurt certain sectors. In 2023, the U.S. goods trade deficit with China reached $279 billion, showing how vulnerable American tech and retail companies are. We’re keeping an eye on options for semiconductor ETFs, as they may react strongly to news related to this deal. The goal of lowering oil prices could put downward pressure on energy markets, despite current geopolitical tensions. This plan comes while U.S. crude production is nearing a record level of 13.2 million barrels per day, which might intensify the effects of any new supply agreements. Therefore, we are looking into put options on WTI crude oil futures or bearish positions on energy sector ETFs. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now