Tariff Tussles: Markets Brace for Trump's Trade Moves

President Trump announced new 25% tariffs on steel and aluminium imports, with China responding with their tariffs on the U.S. as European leaders prepared to react swiftly. Markets initially fell, but quickly stabilized, suggesting traders might think Trump's moves are strategic bargaining rather than permanent. Given past comments by Trump hinting at default on U.S. debt, market watchers remain cautious.

In another dramatic shift for global markets, President Trump introduced fresh 25% tariffs on steel and aluminium imports, signaling possible further tariffs soon. China's immediate retaliatory tariffs intensified the trade tensions, as European leaders stood ready to respond promptly.

Despite the initial market downturn, Wall Street and European futures quickly regained composure, reflecting a possible belief among traders that Trump's aggressive trade maneuvers might be more bargaining strategy than policy change. Analysts highlight Trump's sensitivity to Wall Street movements, suggesting he may backtrack if markets falter considerably.

Adding to the market's uncertainty, Trump's comments on the U.S. Treasury market hinted at potential reneging on national debt, invoking analysis comparing such a move to a global financial disaster. These developments and their implications are set to be addressed by Fed Chair Powell in his upcoming congressional testimony.

(With inputs from agencies.)