Possible scenario
USMCA Review Escalates
20% Chance
The trade deficit negotiations become a central issue in the USMCA review, with Washington threatening tougher terms unless Mexico reduces Chinese-linked exports. This outcome is less likely than a managed compromise but plausible given the political visibility of the deficit and prior tariff decisions.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Consumer Cyclicals -2.2%
- Industrials -2.1%
Portfolio impact
S&P 500-1.2%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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