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Canadian Prime Minister Carney

• Says Trump’s tariff announcement has preserved a number of important elements of our relationship
• Says we are going to fight these tariffs with countermeasures
• Says we will act with purpose and with force

Earlier:

• Canadian dollar jumps as Canada exempted from new US tariffs

CAD update:

This article was written by Eamonn Sheridan at www.forexlive.com.

Trump has announced a 10% baseline tariff on all U.S. imports, along with higher “reciprocal” tariffs on about 60 countries, including key allies and major trade partners like China (34%) and the European Union (20%).

Whiter House press sec Leavitt says the 34% rate on China will be added to the current 20% rate for a total tariff of 54%.

These measures mark a significant escalation in trade protectionism, reversing decades of trade liberalisation.

Trump justified the move as a response to unfair foreign trade practices, including tariffs and non-tariff barriers that disadvantage American goods. However, Canada and Mexico, already subject to high tariffs, will not be affected further.

The baseline tariff takes effect on April 5, while the higher tariffs will begin on April 9. Exemptions apply to certain goods like pharmaceuticals, semiconductors, copper, gold, energy, and critical minerals not sourced in the U.S.

These actions have shaken global markets, with U.S. stocks losing nearly $5 trillion in value since February, and analysts warning of rising inflation and recession risks. While the Trump administration claims these tariffs will revive key industries, many businesses and economists fear long-term economic damage and increased consumer costs.

• S&P 500 futures down 3.5%, testing the March low
• Yen a big, big winner on Trump’s tariff trade war announcement

This article was written by Eamonn Sheridan at www.forexlive.com.

Spoos are getting beaten up in a 3.5% fall. Nasdaq future are down 4.1%.

It’s safe to say the market doesn’t like what its heard on tariffs. I wonder if we get some leaks about negotiations ahead of April 9.

Technically, that level is a big one or it takes us to the lowest since September with some support at the Sept low of 5394.

This article was written by Adam Button at www.forexlive.com.

Stock market implosion in response to Trump’s latest economic policy.

ES and NQ both lower. Big time.

Globex has reopened for ‘overnight’ trade.

• Here’s the full list tariff war declaration

This article was written by Eamonn Sheridan at www.forexlive.com.

The stand out winner across major FX is JPY.

USD/JPY is down more than 150 points from earlier highs, dropping under 148.80 as I update.

Yen crosses tracing out the same sort of pattern (EUR/JPY is circa 161.00 … massive slump).

Yen loving the chaos, standing out as a ‘safe haven’. Sheesh …!

This article was written by Eamonn Sheridan at www.forexlive.com.

• I would advise none of the countries to retaliate as these numbers are high-end
• We can see if there is a different floor (from those announced)
• The mindset from Trump might be to let things settle for awhile
• Says he has no plans to travel to China
• I’m not a part of the negotiations so we will see if there are any before April 9

To be honest, it sounds like he was sidelined in this and he sounded rattled. He didn’t have any info and didn’t even know what the tariff rates were on Mexico and Canada.

This article was written by Adam Button at www.forexlive.com.

Trump has scattered tariffs all over the place but many of the losers in this are countries that don’t send much to the US anyway.

Some critical partners:

• China 54%
• European Union 39%
• Japan 24%
• India 26%
• South Korea 25%
• Vietnam 49%

Now there is an important caveat here in that none of those go into effect until April 9 so there is some time to negotiate.

Equally critical is that Canada and Mexico remain at 0% rates on USMCA-compliant goods, which covers most trade between them and for some other trade is just a matter of paperwork.

Last week, I wrote about what is expected on tariffs overall and I came down at 9-10% for average US trade plus 50% on China. Without doing the math, I think we’ve landed about there. I also think that could fall if we get some negotiating from the EU, Japan and others.

All that said, these China tariffs alone are a big problem for consumer prices and could create some big problems, especially with Vietnam still in there (it was a trans-shipment hub).

This article was written by Adam Button at www.forexlive.com.

White House press secretary Karoline Leavitt confirms that the 34 percent tariff on China is ON TOP of the previous 20 percent. So that means the rate on China will be *54* percent when these tariffs take effect.

This will hugely impact consumers in the US. Imagine a 50% price hike for washing machines and what have you.

And, you think US consumers have been shafted, how about business? Trump dumped a 46% tariff on Vietnam and 49% on Cambodia – many companies moved all their production to these countries to get out of China.

This article was written by Eamonn Sheridan at www.forexlive.com.

The Canadian dollar looks like the winner of Trump’s tariff announcement.

The announcement was unclear on whether Canada would be included in the 10% baseline but CNBC confirms that both Mexico and Canada have exceptions and will remain under the current regime that allows USMCA-compliant goods to continue to enter the US tariff-free.

That’s a good chunk of good news for those countries but also for the US as those two represent a very large portion of imports into the country.

USD/CAD is quickly down to 1.4223 from 1.4315. That runs in contrast to some of the other moves and is the lowest level in that pair since Feb 24.

Canada and Mexico remain under 25% fentanyl tariffs but those don’t apply to USMCA-compliant goods, which cover most trade between the countries.

There is also the 25% tariff on finished autos but parts are excluded until early May, which I suspect is going to leave some room for negotiation. I suspect we haven’t heard the end of negotiations with this trio.

All that said, this result very much echos some of the things that White House economic advisor Kevin Hassett said, indicating that the goal was a North American trade block.

This article was written by Adam Button at www.forexlive.com.

European Union President von der Leyen to make a statement on US tariffs Thursday morning – 5am Brussels time, 3am GMT

Just so long as she knows I already said to kiss your a** goodbye …

• Its kiss your a** goodbye time for the global economy – massive tariff war declared

She’ll be responding to Trump’s 20% tariff rate on the EU

This article was written by Eamonn Sheridan at www.forexlive.com.

More, this form an unnamed White House official:

• A 10% baseline tariff will be imposed on all countries, with higher reciprocal tariffs for the worst offenders.

• Countries will be charged half of the calculated reciprocal tariff rate, which considers both tariffs and non-tariff barriers.

• Products covered by Section 232 tariffs (autos, steel, aluminum, copper, lumber) will be excluded.

• Trump plans to declare a national emergency due to national and economic security concerns related to U.S. trade deficits.

• Tariffs on Canada and Mexico related to fentanyl and migration will remain in place as long as those issues persist.

• An executive order will specify reciprocal tariffs by country.

• The tariff system includes a baseline floor for all countries to prevent circumvention.

• The baseline tariff rate will take effect on April 5 at 12:01 a.m.

• Reciprocal tariffs will take effect on April 9 at 12:01 a.m.

• It will likely take a long time for other countries to remove non-tariff trade barriers.

• Trump also plans sector-specific tariffs for semiconductors, pharmaceuticals, and possibly critical minerals, which will not be part of the new tariff regime.

• Around 60 countries are on the “worst offender” list.

• The tariffs are being implemented under the International Emergency Economic Powers Act (IEEPA).

• Trump will respond to retaliation from other countries to ensure the emergency order remains effective.

• Goods from Mexico and Canada that comply with the USMCA will continue to be exempt.

• USMCA-compliant goods will also remain exempt from tariffs tied to fentanyl-related issues.

• Post–World War II institutions are considered “no longer fit for our times and our economic situation.”

This article was written by Eamonn Sheridan at www.forexlive.com.

The document at Trump’s tariff announcement puts China’s tariff rate at 34%

That’s a sliver of good news in an otherwise negative announcement on tariffs as there was talk it would be 50%. Now what’s not clear is whether this new tariff is on top of tariffs like fentanyl (25%) that are already in place. That will be a critical detail.

Because if this is 34% in addition to what’s already there, it rises to above 60%. Also notable is that this number is below Vietnam.

Another notable thing is that:

• baseline 10% tariffs take effect April 5
• higher reciprocal rates will take effect April 9
• the higher rates apply to about 60 countries

This article was written by Adam Button at www.forexlive.com.