US Treasury Secretary Scott Bessent met several world leaders this week to set out US plans to secure trade deals and adjust policies. The agenda was described as aimed at reversing damage from the first year of the Trump administration, with a focus on earth minerals and wider trade.
In a meeting with UK Chancellor Rachel Reeves, Bessent said the US remained committed to its “Economic Fury” policy agenda. The talks covered trade and related policy priorities.
Trade Policy Reset And Global Outreach
Bessent also met Italian Economy Minister Giancarlo Giorgetti and discussed critical minerals. Separate talks were held with Japan’s Finance Minister, where Bessent reaffirmed a “strong alliance” between the US and Japan.
The meetings this week signal a clear pivot away from the protectionist policies we saw implemented in 2025. This agenda of “Economic Fury” appears focused on aggressively re-establishing predictable trade rules, which is a bearish signal for overall market volatility. We should anticipate a calmer CBOE Volatility Index (VIX), which spiked above 30 during the tariff uncertainty last year, settling closer to its historical average around 19.
The focus on critical minerals with Italy is a direct play to reduce supply chain risk for our tech and auto sectors. Given that the U.S. has historically imported over 75% of its rare-earth metals from China, securing European sources could stabilize input costs for EV and semiconductor manufacturers. This makes call options on automakers and the SOXX semiconductor ETF look more attractive as a key risk is mitigated.
Reaffirming alliances with major trading partners like Japan and the UK suggests stability in currency markets. With Japan being a top-five trading partner, responsible for over $200 billion in annual goods trade, a stronger alliance reduces the likelihood of sharp, unexpected swings in the USD/JPY pair. This environment is favorable for traders selling options premium on currency-focused ETFs.
Sector Winners And Losers
This policy shift will create clear winners and losers compared to the environment in 2025. Industrial companies that rely on imported materials should see their margins improve, while domestic producers like steelmakers, who were shielded by tariffs, may face renewed pressure from international competition. We should be exploring long positions in industrial sector ETFs and considering puts on commodity producers that benefited most from last year’s protectionism.
