Four Countries Later, Trump Tariffs Resolve Prediction Market

Traders on Kalshi and Polymarket tracked the chaos of Trump's first tariffs of his second term

Four Countries Later, Trump Tariffs Resolve Prediction Market

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On Tuesday, Trump’s 10% tariffs against China’s goods went into effect. Before China, Trump threatened tariffs against Colombia, Mexico, and Canada. 

Kalshi’s tariff market required tariffs to go into effect for the market to resolve while Polymarket only required that the tariffs be issued through an executive order. Trump’s delay of tariffs against Mexico and Canada kept Kalshi’s market from resolving but not Polymarket’s. 

Kalshi’s market on whether Trump would impose tariffs on any country in his first 100 days tracked the chances of Trump’s tariff threats becoming a reality.

Trump’s tariff threats against Colombia

During his first week, Trump focused on threats from China, regaining American control of the Panama Canal, and acquiring Greenland from Denmark. 

So Trump’s Jan. 26 tariff threats against Colombia caught many observers by surprise. After Colombia’s president refused to accept an American plane of deportees, Trump threatened to tariff Colombia and suspended Colombian visas. Kalshi’s market on Trump imposing tariffs on another country opened at 83% then rose to almost 98% during the 12-hour standoff. 

Late in the evening, Colombia’s president relented and allowed deportation flights under Trump’s terms. Trump dropped his tariff threats against Colombia, and throughout the day on Jan. 27, the odds fell as low as 64%.  

Tariffs odds soon rebounded as Trump set three new targets in his sights.

Canada, Mexico, and China

On Jan. 28, CNN reported that Trump was considering tariffs on China, Mexico, and Canada “as soon as this week.” Tariff odds rose to the mid-80s, but with no concrete news, the tariff odds fell to the mid-70s throughout the next day. 

Jan. 30 saw early reports that Trump’s tariffs were imminent, and the next day, Reuters confirmed that tariffs would go into effect on March 1. Then Trump’s press secretary called the reports false, and tariff odds briefly plummeted from about 84% to 55%. The odds were back above 80% about an hour later and would reach the low 90s later that afternoon. The denials were unconvincing to the market. 

Finally, Trump signed an executive order imposing tariffs on Canada, Mexico, and China that would go into effect on Feb. 4. The forecast reached the high 90s, and the market appeared set to resolve. 

Then on the morning of Feb. 3, Trump announced a deal with Mexico that delayed its tariffs by one month. Tariff odds fell from 96% to 88%. Early that afternoon, Canada reached its own deal that delayed its tariffs by one month. Tariff odds fell further to 80%. 

China reached no such deal, and the tariff odds increased steadily until the market resolved in the early hours of Feb. 4. 

Trump’s first tariffs arrived through a series of twists and turns, which prediction markets tracked each step of the way. 

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