Trump's tariff plans shake markets: Currencies tumble
Donald Trump confirmed that his initial economic actions after the January inauguration will involve raising tariffs on products from China, Canada, and Mexico. The market has already reacted.
10:39 AM EST, November 26, 2024
Trump indicated that one of his first decisions would be to impose a 25% tariff on all products from Mexico and Canada. He also plans to impose an extra 10% tariff on all products from China in addition to the tariffs currently applied or those that will be implemented later.
Trump threatens new tariffs; market reacts
"In response, we are seeing a noticeable weakening of the Canadian dollar, which lost 0.8% against the US dollar this morning. USDCAD reached its highest levels since May 2020! Meanwhile, the Mexican peso is down over 1.3%, and the USDMXN pair is testing recent highs from November 5, the US election day. These peaks are the highest since 2022. The yuan remains stable, losing only 0.25% against the dollar, and the USDCNH pair is testing the highest levels since July of this year," stated Michał Stajniak, Deputy Director of Analysis at XTB.
"Europe is slightly caught in the crossfire, as we observe declines in futures contracts and a weakening euro. However, these movements are not significant," adds the analyst.
The president-elect mentioned that the tariffs will remain in effect until the countries halt the supply of drugs, particularly fentanyl, and "the invasion of illegal aliens" into the United States.
American law grants the president the authority to implement tariffs through executive orders, a power Donald Trump exercised several times during his first term when he imposed tariffs on Chinese and European steel and aluminum.
