Trump has caused an uproar by not nominating former usa Trade Representative Robert Lighthizer to again take on the role, which is responsible for trade negotiations with countries like Mexico.

However, the market continues to downplay Trump's threat of imposing new tariffs on usa imports, possibly interpreting the decision not to nominate Lighthizer as suggesting that the tariff threat will be used as a negotiation tool rather than a permanent government policy.

Recent reports suggest that Trump did not choose Lighthizer because he believes the latter does not sufficiently support Trump's 2.0 tariff policy.

Axios points out: "Trump told friends he rejected Robert Lighthizer's cabinet position because he 'was too timid to take big actions.' He is loyal, but too timid to take bold, risky actions."

It is speculated that this means Trump's chosen successor, Jamieson Greer, Lighthizer's former chief of staff, will be willing to take on those risks.

Tobin Marcus, a policy analyst at Wolfe Research, wrote in a report to clients on Tuesday: "Trump's personnel decisions reinforce our view that the threat of tariffs is real."

Lighthizer hinted in his 2023 publishing, "No Trade is Free," that he was one of the less aggressive voices on trade issues in Trump's first administration.

He wrote that in the early days of the first Trump administration, several aides wanted to "directly tear up" the North American Free Trade Agreement (NAFTA) between the USA, Mexico, and Canada, which had been a long-time target of Trump's criticism.

"Although I am also a critic of NAFTA, I wanted to terminate the agreement," Lighthizer wrote, adding that he suggested Trump reform the agreement, which ultimately led to the approval of the USMCA trade agreement reached in 2018.

Henrietta Treyz, the economic policy director at Veda Partners, stated in a report on Monday that Lighthizer's absence from the office of the United States Trade Representative would lead to the Trump administration being unfaithful in executing the first phase trade agreement between the USA and China signed by Trump in January 2020.

Barclays analyst Venu Krishna recently noted that Trump's tariff policy may become a headwind for the materials, non-essential consumer, technology, industrial, and medical care sectors, as companies in these sectors "heavily rely on global supply chains."

However, Krishna added, "Trump's campaign proposals would indeed reinforce American exceptionalism and help expand the profitability and valuation advantages of American stocks relative to the rest of the world. Europe, in particular, is likely to be affected by Trump's protectionism and lacks strong political leadership to address the growing structural challenges."

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