The Trump administration's tariff clash with some of America's closest trading partners has sent jitters across financial markets , with investors wondering what's next as the potential for a wider trade war looms.
For a clue, they might want to look at the betting markets.
Betting sites like Polymarket and Kalshi gained attention during the 2024 election when they accurately predicted Donald Trump's win even as polling averages indicated a dead heat. Since then, bettors have used these sites to wager on everything from pop culture to the weather.
This week, after the president announced double-digit tariffs on Mexico, Canada, and China, speculators on Polymarket and Kalshi have been betting that the president's protectionist streak won't end there.
Though Trump said as much on the campaign trail, the White House has offered few specifics on what to expect from a broader trade spat.
If Polymarket speculators are correct, the European Union will be the next target. A bet on the site that has seen about $173,000 of trading volume says there's an 83% chance the EU will face tariffs by April 29, within the window of Trump's first 100 days in office.
The president hinted at this outcome over the weekend, telling reporters that tariffs on the 27-country bloc could happen "pretty soon." Europe's Stoxx 600 tumbled 1.3% on his remarks on Monday before recovering moderately.
A separate Polymarket bet signals strong chances that EU tariffs will range from 10% to 20%.
Otherwise, the bettors are forecasting a 36% probability that tariffs are coming for Panama, likely the result of rising friction over the Panama Canal. The Trump administration has called for the canal to be returned to US control, alleging Chinese influence and unfair treatment of US vessels .
On Monday, Secretary of State Marco Rubio called on Panama to curb China's presence or face US action. What this could look like is unclear.
Bets on Kalshi signal bettors on the site see similar outcomes, though one bet shows a higher chance of tariffs on Colombia and South Korea.
Meanwhile, bettors on Polymarket see some chance that Taiwan and Colombia will get caught in Trump's trade disputes, though speculators see this as fairly unlikely, with chances at 38% and 20%. Some bettors think Denmark, which has clashed with Trump over Greenland's ownership, could also be a target.
Meanwhile, bettors aren't so sure that the current tariffs will last. Those on Polymarket see a 64% chance that the Trump administration will nix Canadian duties by May.
The president has framed the protectionist policy as a negotiating tool and delayed tariffs on both Mexico and Canada after reaching concessionary agreements with the two governments.
Betting markets are also eyeing a bellwether for inflation that became a rallying cry for politicians and voters in the last election — egg prices.
If the bets are accurate, they're going up.
Speculators on Polymarket believe the price of a dozen eggs will keep rising , with the highest probability assigned to a range of $5.50 to $5.75 a dozen in February. According to data from the Federal Reserve Bank of St. Louis , the US city average for a dozen eggs was $4.14 in December.
There are also bets that the consumer prices broadly will keep edging up this year.
It's a warning economists have been voicing since before Trump's election and a trend speculators are picking up on. On the same weekend that tariffs were announced, the outlook on Kalshi for inflation based on the consumer price index ticked up sharply . The highest chances for the 2025 inflation rate are now being assigned to a range of 2.6% to 3%, with 21% of bettors seeing consumer prices in that range by the end of the year.
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