Trump’s Tariffs Weaken U.S. Dollar and Erase Stock Market Gains

March 5, 2025

By Evans Momodu
2 minute digest
Published 13:42 UK GMT, March 5, 2025

President Donald Trump hoped that his tariff policies would strengthen the U.S. economy, but just one day after they took effect, the U.S. dollar has dropped to a four-month low against major global currencies.

The U.S. Dollar Index—which tracks the dollar’s performance against major currencies—has fallen sharply.
A weaker dollar means higher costs for imports, impacting U.S. businesses and consumers.
The British pound now stands at $1.2845, its strongest level against the dollar since November.

While Trump has acknowledged the potential for temporary economic disruption, concerns are growing that the dollar’s status as a safe-haven currency may be at risk.

Stock Market Wipeout: Nasdaq and S&P 500 Fall to Pre-election Levels

The U.S. stock market has erased all gains made since Trump’s election, with major indexes seeing significant declines:

Nasdaq Composite: Dropped back to pre-election November levels
S&P 500 Index: Also fell to pre-election levels
Dow Jones Industrial Average (DJIA): Holding at a mid-January high, but still under pressure

Global Markets React to U.S. Trade Policies

China: Announced a 5% growth target, helping stabilise Asian markets.
Germany: Eased borrowing restrictions to increase spending on defence and infrastructure, boosting European stocks.
Stoxx 600 Index: Jumped 1.4%, recovering losses from earlier in the week.

Other Market Developments

???? The British pound has fallen below €1.20, now trading at €1.1987.
????️ Oil prices briefly dipped below $70 per barrel, but Brent crude rebounded to $70.88 after oil-exporting nations confirmed expanded production.

With the U.S. economy facing increased market volatility, business leaders and economists are closely monitoring whether Trump’s tariff strategy will deliver the long-term economic benefits he promised—or if the short-term damage will persist.
Source: Sky news
Image: Linkedin