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Donald Trump’s new tariffs led to a significant 4% drop in US equity index futures, outpacing declines in global markets. The US dollar weakened considerably, falling 1.5% against the yen and over 1% against the euro, amid rising trade tensions and economic concerns. Asian stocks fell by 1.7%, while European futures dropped 2.4% before a partial recovery.
US President Trump has announced a significant tax increase for companies and consumers, implementing tariffs based on the bilateral trade deficit. A 10% tariff on the uninhabited Heard and Macdonald Islands raises questions about the administration's trade policy and its potential impact on US prices, which could rise by 1.7% to 2.2%. The situation may lead to market speculation about a recession or weakened growth, depending on whether the administration retreats from these tariffs.
Donald Trump's newly announced tariffs, including a 10% baseline on all U.S. imports and higher rates on specific countries, could push the U.S. economy towards recession by increasing inflation and reducing consumer spending, according to JP Morgan's chief economist. The tariffs are projected to generate $400 billion in revenue but may lead to a significant contraction in real disposable income and consumer spending in the coming quarters. Global leaders are preparing retaliatory measures, raising concerns about widespread economic repercussions.
The US dollar weakened on April 3 after President Trump announced new tariffs on imports, set to take effect on April 9, imposing a 10% baseline levy on goods from 60 countries. This move raised concerns about a potential global economic slowdown, leading to declines in global stocks and increased demand for bonds and gold. The dollar index fell to 102.98, its lowest since October, reflecting a 4% decline this year, while Asian currencies struggled, with China's yuan hitting its weakest levels in months.
New tariffs announced by Trump, including a 10% levy on most imports and higher rates for specific partners, are expected to slow U.S. economic growth and increase market volatility. UBS predicts potential rate cuts of 75 to 100 basis points by the Federal Reserve and warns of a 30% chance of recession if tariffs persist. Gold is seen as a strategic hedge, with expectations for its price to rise to $3,200/ounce by year-end, while equity markets may experience volatility but are projected to end the year higher.
President Trump has imposed a 10% tariff on most imports, escalating a global trade war that could lead to inflation and economic slowdown. China faces a 34% tariff, while the EU and Japan are hit with 24% and 20% tariffs, respectively, prompting threats of countermeasures. Critics warn these tariffs could significantly impact American families and the global economy.
Drastic tariffs are set to impact 60 countries, with a basic 10% tariff on all US imports starting April 5. The EU faces a 20% surcharge, while Chinese goods will incur tariffs exceeding 50%, raising average tariffs on Chinese products to 65%. This escalation risks a global trade war, increasing inflation in the US and creating challenges for the Federal Reserve, as skepticism grows in financial markets.
The U.S. has implemented a significant tariff plan, including a 10% universal tariff and reciprocal rates up to 54% against China, marking the largest increase in over a century. This shift could reduce U.S. growth by up to 2.5% and increase inflation, while also forcing export-reliant economies to seek new growth avenues. The long-term impact remains uncertain, with potential for recession and inflationary effects, depending on how negotiations and retaliations unfold.
Japan’s Nikkei share average plummeted to an eight-month low on April 3, following President Trump's announcement of new tariffs, including a 24% levy on Japanese goods. The index fell as much as 4.6% in early trading, with banks and exporters, particularly automakers, facing significant pressure. Analysts predict continued market volatility as Japanese officials explore options in response to the tariff impact.
Japan is on track to sustainably meet the central bank's 2% inflation target, supported by strong consumption and capital expenditure, according to the IMF. While inflation risks are balanced, growth faces potential downside threats, including a global economic slowdown. The BOJ is urged to gradually withdraw monetary support as the economy aligns with forecasts, with expectations of 1.2% growth in 2025 and a slight inflation decrease to 2.4%.
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