Tariff Shocks: Trump’s Trade Tactics Rattle Markets

The dollar surged following President-elect Trump's tariff threat on imports from Canada, Mexico, and China, impacting various stocks and currencies. Stocks fell as the market reacted to potential trade obstacles. Trump's comments on tariffs have raised concerns among investors, affecting global markets and currency valuations.

The dollar witnessed a significant rise on Tuesday after U.S. President-elect Donald Trump pledged to impose tariffs on all imports from Canada, Mexico, and China. This action led to a decrease in stock values, reversing gains from the prior session following Scott Bessent's Treasury Secretary nomination.

Market analysts noted that Bessent's appointment caused a dip in U.S. yields as investors moved towards Treasury bonds, previously lowering the dollar. Analyst Matt Simpson suggested Trump aimed to reinforce his authoritative stance over market expectations, especially following Bessent's nomination.

Trump's tariff plan, especially concerning Mexico, heavily influenced currency exchanges, causing the dollar to appreciate against trade-sensitive currencies. Meanwhile, Japan's market dipped due to concerns over its export sector, especially automotive, facing potential tariff challenges.

(With inputs from agencies.)