Trump's Surprise Tariff Announcement Shakes Markets

U.S. President Donald Trump announced tariffs on Canadian, Mexican, and Chinese imports to combat illegal immigration and fentanyl. Market strategists predict negative effects on currencies and equities, while some see room for negotiation. Concerns over growth impacts and policy intentions fuel market anxiety.

In a sudden move, U.S. President Donald Trump declared on Saturday that tariffs of 25% on Canadian and Mexican imports and 10% on Chinese goods will commence Tuesday. His decision aims to counter the perceived national emergencies of fentanyl traffic and illegal immigration.

Market reactions have been swift, with strategists and investors voicing concerns. Nick Twidale of ATFX Global expects currency gaps and a negative impact on risk, while equities may struggle in Asian markets. Nick Ferres of Vantage Point Asset Management notes potential room for negotiation, suggesting that the situation might not be as dire as feared.

However, the prospect of reciprocal tariffs looms large. Moh Siong Sim from Bank of Singapore highlights the potential growth challenges for Mexico, Canada, and China, with a supported U.S. dollar amid tariff shocks. The sentiment is echoed by Dustin Reid of Mackenzie Financial, who predicts significant market disruptions if the tariffs proceed as anticipated.

(With inputs from agencies.)