US plans tariffs on USCMA countries, Greer says By Investing.com

The U.S. plans to keep tariffs on Mexican goods as long as the trade deficit remains large, while Trade Representative Jamieson Greer said the administration still has significant trade issues with Canada. Upcoming USMCA talks will focus on changing rules of origin to increase U.S. content, signaling continued tariff pressure and supply-chain friction. The article also notes spot gold fell 1% as fresh U.S. strikes offset hopes for an Iran peace deal, adding a modest risk-off geopolitical backdrop.

Analysis

The market is starting to price tariff policy less as a negotiation tactic and more as a durable margin tax on cross-border manufacturing. That matters because the first-order hit is not just higher landed costs, but a second-order squeeze on inventory planning and capex: firms with Mexico/Canada exposure may delay orders until the rules of origin path is clearer, which can depress near-term demand for high-ticket enterprise hardware even before any tariff actually lands.

For SMCI, the risk is less about direct tariff pass-through and more about friction in the AI server supply chain. If import costs rise on chassis, power subsystems, and assembly inputs, OEMs will try to re-source, but the short-run effect is higher lead times and lower gross margin elasticity; that can compress multiple even if unit demand stays intact. APP is more insulated operationally, but a hawkish trade backdrop tends to lift discount rates and cyclicality fears, which can hit high-duration software names when factor rotation turns away from growth.

The contrarian read is that the market may be overestimating the immediacy of tariff earnings damage and underestimating the strategic winners from re-shoring and North American content requirements. If this policy evolves into a multi-month procurement reshuffle rather than a clean demand shock, vendors that can localize assembly, lock in domestic components, or capture incremental compliance spend could see share gains. The key timing question is weeks vs quarters: the headline risk can hit stocks immediately, but the P&L impact likely shows up with a lag into 2H and next-year guidance.

The cleaner trade is to fade the most tariff-sensitive hardware supply chains on any strength rather than chase a broad short. For SMCI specifically, the setup is asymmetric if investors start to haircut 2026 margin assumptions before the market has evidence of volume destruction; for APP, a short is weaker unless the broader tape de-rates growth multiples. Any reversal likely comes from exemptions, delayed implementation, or USMCA carve-outs that preserve enough flexibility to keep North American manufacturing competitive.

Key Decisions for Investors

• Short SMCI on rallies over the next 1-3 weeks; target a 10-15% downside if tariff rhetoric hardens, with stop-loss on any announced USMCA carve-out that preserves component flow.
• Use put spreads on SMCI 2-4 months out to express downside with defined premium; best risk/reward if implied vol lags headline risk.
• Avoid initiating fresh longs in APP until tariff policy is clarified; if you must own growth, prefer a basket with lower goods-import sensitivity over the next quarter.
• Pair trade: long domestic-content beneficiaries vs short Mexico/Canada-exposed hardware assemblers; hold into upcoming trade-negotiation headlines, as the spread should widen before earnings revisions catch up.
• If tariff implementation is delayed or softened, cover hardware shorts quickly and rotate into beneficiaries of North American re-shoring rather than staying short beta.