Trump Trade War Breaks: A New Dawn Beckons

Stocks Plunge, Dollar Daubs—Trump’s Tariff Tornado Has Markets Spinning

Welcome to the new trading week, folks. The stock market took a nosedive, the US dollar turned into a gleaming champion, and the world is still trying to figure out what Trump’s latest tariff wizardry actually means for everyone.

Why the Shake‑up? A Quick “Tariff Alert” Recap

Trump announced 25% tariffs on everything from Canada and Mexico—plus 10% on goods from China.
Canada will hit the US with an equal 25% tariff on a whopping $155 billion of trade.
Mexico’s finance whiz is planning a matching response, and China isn’t playing fair either—lawsuits and counter‑tariffs are on the table.
Markets didn’t brush up on these surprises before the weekend, so the dollar was the first casualty of panic.

Peoples Watching the Dollar War

The currency war made the dollar strengthen against almost every major currency—in particular the euro slid sharply, while the Canadian loney threatened a two‑decade low. The EU’s future tariff threat is hovering in the background.

Equity Futures Feel the Squeeze

Front‑month S&P futures ran down about 2% right as the news hit.
US Treasury yields slanted toward long‑term “safe haven” demand as the curve flattened in the short end.

What’s Behind the Tariffs? (The Politics Behind the Numbers)

Trump calls this a fight against:

Trade deficits
Fentanyl imports
Old USMCA terms
“Outsourcing” of critical industries

But he’s really gunning for a redo of the USMCA and a push for reshoring—all while keeping that America First flame on high.

Inflation, Growth and the Fed’s Uncertain Future

Tariffs spiral inflation upward, but might slosh growth downward.
That means the Fed could stay on hold longer—cutting rates might get pushed back.
Economic forecasts might get scratched out or heavily revised. The “December SEP” looks more like a footnote.
Expect the potential for a March SEP to be a wild guess.

Market Take‑away: Volatility Wins Big

There’s policy uncertainty that’s likely to keep inflating. Cross‑asset volatility will spike as investors struggle to price in a moving tariff landscape. If the tariffs have lingering effects, we’ll see the dollar keep climbing. Equities might hold steady—earnings are resilient, consumer spending remains firm, and the re‑shoring idea could benefit certain sectors.

Haven Hunting It’s a Gold Rush

Treasuries may not scoff as the scene heats up—customers might turn to gold for shelter. Metal price momentum shows a frenzy, and it looks like the bulls are keeping their grip.

Week‑in‑a‑Glance: What’s on the Calendar?

US Labour Data—The March jobs gala might lean lower if California’s wildfires keep knocking the numbers.
US ISM Manufacturing & Services PMIs—Watch for early signs of the manufacturing engine.
Eurozone inflation and earnings—Will the ECB cut by 25bp in March? The signs are in.
“Magnificent Seven” earnings—Google, Amazon, and others are due. The AI wave is bringing new risk‑keeping—DeepSeek AI might get under the radar.
US Treasury announcements—Quarterly refunding estimates on Monday and borrowing breakdown on Wednesday add another layer for bond players.

Take this week’s market cooking seriously—there’s noise, but there’s also honey in the mix.