Trade War Tensions Escalate: Betting Markets Signal Extended Tariff Standoff and Economic Uncertainty
Staff Editor Betting Markets Predict Prolonged Tariff Standoff, Economic Uncertainty
President Trump’s recent tariff impositions have sent shockwaves through the stock market, fueling concerns about a potential economic downturn. While some analysts view these tariffs as a negotiating tactic that could be reversed, betting markets paint a less optimistic picture for the coming months.
Platforms like Polymarket and Kalshi, known for their accurate predictions in events such as the U.S. presidential election, are showing pessimism regarding the reversal of tariffs in the near future. A high-volume bet on these platforms indicates only a 3% chance of eliminating tariffs on China by May, while the odds of lifting Canadian tariffs by the same time stand at 15%.
However, long-term predictions offer a glimmer of hope. Speculators on Kalshi see a 74% chance of Canadian tariffs being lifted by December 2025. Nevertheless, few expect significant tariff reductions before July, with only a 27% likelihood of tariffs being mostly dialed back by then.
Regional expectations vary, with some smaller wagers suggesting certain countries may see tariff reductions early in the summer. Asian economies, including Vietnam, which have faced some of the highest tariff rates, are expected to see easing later this year.
Analysts believe President Trump is using high tariffs as leverage in trade negotiations. The president himself has mentioned the possibility of tariff cuts if other countries offer favorable deals, emphasizing the negotiating power tariffs provide.
Economic concerns loom large, with betting markets showing high recession odds. One Kalshi bet places the likelihood of a recession at 60%. The recent tariffs have caused market turmoil and increased fears of a global economic slowdown.
While some experts believe the extreme nature of the tariffs suggests they won’t last long, betting markets indicate a prolonged period of economic uncertainty lies ahead. As the situation develops, investors and policymakers alike will be closely watching for any signs of change in the current tariff landscape.
