Investors shouldn’t overreact to Trump tariff news, Wall Street says

President Donald Trump again reiterated his plan to impose 25% tariffs on Canada and Mexico starting this weekend, but Wall Street still seems willing to call his bluff. Trump said late Thursday afternoon that his administration will impose the steep import taxes on the two largest trading partners of the U.S. Stocks fell briefly after his remarks before quickly rebounding and finishing up on the day. The major averages also gained ground on Friday morning, as traders and strategists appeared to shrug off the potential Saturday start date for the increased tariffs. SPY 5D mountain Stocks are rising to the end of the week despite the possibility of high tariffs being enacted over the weekend. Evercore ISI strategist Sarah Bianchi said in a note to clients that the tariffs being officially announced would “no doubt rattle markets” but the likelihood they ever truly go into full effect still seems low. “We see two outcomes here. One is some kind of last-minute deal around border security, and the other is an Executive Order announcement” that says the 25% tariff will go into effect sometime over the next few weeks, Bianchi wrote. Goldman Sachs has estimated that across the board tariffs on goods from Mexico and Canada could raise prices for consumers and hurt economic growth, but Goldman economist Alec Phillips downplayed concerns about the tariffs on Friday. “We still do not see a sustained 25% tariff on both countries as the base case. Instead, we think it is more likely that Trump will announce a tariff with delayed implementation, targeted at certain imports, starting at a lower rate that rises over time, or some combination of these,” Phillips said in a note to clients. One detail to keep an eye on could be oil, as Trump indicated Thursday that his team had not yet decided whether to include that category in the tariffs. The U.S. imports millions of barrels of oil per day from Canada, according to the U.S. Energy Information Administration.