Trade war concerns are back
All after President Trump signed an executive order that modified reciprocal tariffs on dozens of countries, with updated duties ranging from 10% to 41%.
Here are the key points you should know:
- “Trump set rates including a 35% duty on many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan, and 39% for Switzerland, according to a presidential executive order,” according to Reuters.
- 10% is now the minimum tariff imposed across all imports.
- Canada: Tariff raised to 35% from 25%
- 40 Countries now face a 15% tariff.
- China and Mexico had their deadlines delayed by 90 days.
If you want to see the full list of updated tariffs, you can see it here.
With that, investors may want to trade the potential for sky-high volatility – which we can do by investing in volatility-based ETFs such as:
ProShares Ultra VIX Short-Term Futures ETF (UVXY)
The ETF was designed to match two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index. Last trading at $16.90, we’d like to see the UVXY test $22.50 initially.
iPath S&P 500 VIX Short-Term Futures (VXX)
The VXX ETN, which provides exposure to the S&P 500 VIX Short-Term Futures Index. Last trading at $45.22, we’d like to see the VXX ETF initially test $52.50.
ProShares VIX Short-Term Futures ETF (VIXY)
ProShares VIX Short-Term Futures ETF provides long exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration.
Last trading at $44, we’d like to see the VIXY ETF also rally to $52.50.
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Written by Ian Cooper