President Trump has stated that tariffs on Canada, Mexico, and China would start today, asserting that manufacturers must build their car plants in the US to avoid such charges. This announcement follows comments suggesting potential changes to the tariffs by Commerce Secretary Lutnick.
Concerns over the impact of these tariffs are growing, with indications that they could harm economic growth, particularly in the US and its neighbours. Recent data showed a slowdown in manufacturing activity, increasing prices, and a dip in employment, reflecting the challenges posed by tariff uncertainties.
Us Dollar Performance
The USD has weakened overall, with the DXY index showing a correlation with its performance during Trump’s first term. There are no significant data releases expected in North America today, while other global markets react to ongoing trade challenges.
Trump’s push to have manufacturing brought back domestically has now moved from rhetoric to policy, with tariffs on several key trading partners taking effect. The reasoning is plain: build within the country or pay to bring goods in. It’s a message aimed at manufacturers, but the broader market is reacting as well.
Lutnick’s earlier remarks hinted that there might be adjustments to these tariffs, yet it appears the position has been firmed up instead. Investors watching for flexibility will need to reconsider their expectations. The most immediate effects are already being seen in economic indicators, where manufacturing growth has slowed, costs have risen, and job numbers have softened. These are not isolated occurrences but rather a reflection of the uncertainty stirred up by trade policies.
In currency markets, the dollar’s weakening is notable. The DXY index is behaving in a way that aligns with its movements during the early years of Trump’s first term. This correlation is important for traders looking ahead, as it suggests historical patterns may offer guidance on what comes next.
Market Reactions
No market-moving economic data is scheduled out of North America today, leaving traders to take their cues from external developments. With other economies adjusting to these trade changes, global reactions will dictate short-term sentiment. Those involved in derivatives should keep a close watch on shifting momentum, as these policies continue to shape pricing beyond immediate headlines.
