Dollar Dips Amid Tariff Turmoil: Trump's Trade Tug-of-War

The U.S. dollar saw a decline as markets reacted to President Trump's tariff policies, including a proposed increase on steel and aluminum imports. Amid tensions with China and concerns over fiscal policies, the dollar's instability highlights the broader economic implications of U.S. trade decisions.

The U.S. dollar slid lower on Monday, reversing some gains from last week, as President Donald Trump's aggressive tariff policies muddied economic waters. The announcement of increased duties on imported steel and aluminum to 50% spurred concerns of inflation and economic deceleration.

In response, China labeled the tariffs as "groundless" and indicated potential retaliatory measures. Meanwhile, talks between Trump's administration and Chinese President Xi Jinping are anticipated to address growing trade tensions soon. The dollar index fell 0.1% to 99.283 as international currencies like the euro and sterling gained slight momentum.

Trump's fluctuating trade policies have left the dollar vulnerable, with previous measures causing significant drops. Despite efforts to mitigate these impacts, fiscal uncertainties, exacerbated by upcoming tax and spending legislation, continue to challenge the greenback's stability.

(With inputs from agencies.)