Investors bought dollars, sold stocks and fretted about inflation on Monday in a scramble to assess the risk of trade war after Donald Trump put tariffs on top US trading partners.
Trump’s orders for additional levies of 25 per cent on imports from Mexico and most goods from Canada, as well as 10 per cent on goods from China are light on detail. But they kick in on Tuesday and have jolted markets that had assumed Trump was mostly bluff and bluster.
“Trump’s trade war has started,” said Alvin Tan, head of Asia currency strategy at RBC Capital Markets in Singapore, noting it was hard to see the dollar retreating any time soon.
The dollar has been the main mover, gaining as Trump headed for and then won office because investors figured tariff-hit countries would weaken their currencies to offset the impact.
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