Markets React to Trump's Tariffs as Trade War Rages on

By Evans Momodu
4 minute digest


Trump’s latest tariff moves have rattled global markets, fuelling fears of a full-scale trade war. With steep tariffs of 25% on Canadian and Mexican goods and 10% on Chinese imports, stock markets across Asia, Europe, and the U.S. reacted sharply, reflecting investor uncertainty.

Market Fallout

• Asian markets were the first to take a hit, with Japan’s Nikkei falling nearly 3% and South Korea’s Kospi dropping over 2.5%, particularly impacting export-heavy industries like automotive manufacturing.
• European stocks also tumbled, with Germany’s DAX and France’s CAC experiencing sharper losses than the UK’s FTSE 100.
• The U.S. markets managed a partial recovery, with the S&P 500 down just 0.4% by the close, though major manufacturers and companies like Tesla saw more significant declines.

Currency Volatility

• The U.S. dollar strengthened, while the Mexican peso and Canadian dollar fell sharply.
• The euro weakened, dropping nearly a cent, while the British pound remained stable, even gaining against the euro.

Trump has also signaled potential tariffs on the European Union, saying import taxes would “definitely happen.” While less definitive on the UK, he warned that Britain is “out of line” in trade relations with the U.S., adding, “we’ll see what happens.”

A last-minute truce with Mexico delayed the 25% tariffs for a month, thanks to an agreement to deploy 10,000 troops to the U.S.-Mexico border. However, Trump remains firm on imposing tariffs elsewhere and has warned Canada against retaliatory measures.

With global markets on edge and further negotiations pending, Trump’s trade war is escalating—with uncertainty surrounding which country will be hit next.
Source: Sky news