This morning, US stocks took a dive, gold went up. Essentially, as we discussed yesterday, the uncertainty surrounding tariffs and the Iran issue is driving risk aversion: 1. Trump raised tariffs by another 15% on top of the 10% increase last Friday under Section 122. Section 122 is a temporary provision, and the future path of tariff policies remains unclear. When will new tariff policies under Sections 232 and 301 take effect (investigations under Sections 301 and 232 were already initiated last year)? After last year’s early April “liberation day,” the market’s resilience to tariff shocks has improved. However, no one wants to pay for uncertainty. 2. The New York Times reported early this morning that Trump has informed his advisors that if diplomatic efforts or any initial targeted strikes fail to force Iran to abandon its nuclear program, he will consider launching a larger-scale attack in the coming months aimed at removing Iran’s leadership. U.S. and Iranian negotiators are scheduled to meet in Geneva on Thursday, which seems to be the last negotiation to avoid military conflict. Trump has been weighing various options for the U.S. in case negotiations fail. Advisors say that while no final decision has been made, there is a tendency to launch initial strikes in the coming days to show Iran’s leaders that they must abandon their nuclear weapons capabilities. Trump told his advisors that if these actions fail to convince Iran to meet his demands, he will keep the option of a military strike later this year on the table. As we discussed last night, Trump’s setbacks on tariffs have made it imperative for him to push harder on the Iran issue. This has further heightened concerns about geopolitics.