Global shares are frozen while Trump’s tariffs hit markets | Business and economy news
United States shares are at the lowest level since President Donald Trump swore two weeks ago and the second global financial markets collapsed after Ordered tariffs In Canada, Mexico and China, while world leaders responded to its threats to expand the tariffs to the European Union.
Benchmark S&P 500 on Monday fell 1.7 percent on the initial bell on the heels of the largest daily losses in a series of Asian and European Bours for fear of economically harmful trade war.
Trump said his tariffs in the three largest American trading partners, who should enter into force on Tuesday, could cause Americans some short -term pain, but “in the long run, now has run almost every country in the world.”
Later on Monday, Trump said he would pause the new tariffs on Mexico a month after Mexico agreed to enhance his border with the US with 10,000 National Guard officers to stop the flow of illegal drugs, especially fental.
Mexican President Claudia Sheinbaum said the agreement also included an American obligation to act to prevent weapon trafficking with high power in Mexico. The two leaders spoke on Monday on Monday, just hours before the US tariffs on Mexico, China and Canada were supposed to take effect.
Two countries will use a monthly break to participate in further negotiations, Trump said.
Speaking in Washington, DC, on Sunday, after returning from the MAR-a-Lazla estate in Florida, Trump indicated that the 27-state EU would be next in shooting, but did not say when.
“They don’t take our cars. They do not take our agricultural products. They take almost nothing, and we take everything from them, “he told reporters.
The EU leaders meeting at the informal summit in Brussels on Monday said that Europe would be ready to reciprocate if they now impose tariffs, but also invited to reason and negotiations.
Trump hinted that Britain, which left the EU 2020, could be spared the tariffs, saying, “I think it can be elaborated.”
Now he is the largest trade and investment partner of the EU. According to Eurostat data from 2023, the US had a deficit of 155.8 billion euros (161.6 billion dollars) with the EU at the goods trade, compensated by an excess of 104 billion euros (107.6 billion dollars) in services.
EU Foreign Policy Chief Kaja Kallas said there are no winners in the trade war, and if one broke out between Europe and the United States, “then he is the one who laughs on the side of the cinema.”
Markets have swung
Trump said on Monday that he was talking to Canadian Prime Minister Justin Trudeau and that he would do so again at 3 pm (20:00 GMT).
Both Canada and Mexico announced the retaliation of tariffs to the United States.
Economists have said that the Republican President’s plan will impose 25 percent of Tariff Canada and Mexico, and 10 percent of Tariff at China will slow down global growth and increase prices for Americans.
It is a fear that these tariffs will encourage food prices, electronics and all kinds of other items for US households, exerting a pressure at the US Inflation rate in the United States, which is largely slowed from the peak almost three years ago. A stubborn tall or accelerating inflation could prevent US federal reserves from reducing interest rates, which began to work in September to stimulate the domestic economy.
Trump claimed that the tariffs were needed to suppress immigration and narcotics trade and encourage the domestic industry.
The financial market reaction on Monday reflected concern about falling from a trade war. The Tokyo shares have completed the day of down almost 3 percent, and the reference value of Australia – often proxy stores for Chinese markets – dropped 1.8 percent. The Chinese land market is closed to the lunar New Year’s holidays.
About the time of lunch in Europe, the German DAX index decreased by 1.8 percent, the French Cac reduced 1.9 percent and the British FTSE 100 lower by 1.5 percent.
Chinese Juan, the Canadian dollar and Mexican peso all collapsed toward the Exalted Dollar. With Canada and Mexico, the best sources of import of US oil, US oil prices jumped more than 1 percent, while the petrol future increased by almost 3 percent.
Trump’s tariffs will cover almost half of all US imports and will demand that the United States will be more than doubled their own production to cover the gap – an improper task in the short term, analysts wrote.
Other analysts said the tariffs could throw Canada and Mexico into a recession and start “stagflation” – high inflation, growth growth and high unemployment – at home.
In Europe, economists at Deutsche Bank said they are currently factor in a 0.5 percent hit on a gross domestic product (GDP) if Trump imposes 10 percent of the EU tariffs.
National ambulance
The White House facts did not give details about what Canada, Mexico and China will need to do to win a refund.
Trump promised to keep sanctions as long as what he described as a national emergency because of the fental, the deadly opioid and illegal immigration to the US.
China called the problem of Fentanil America and said she would challenge the tariffs at the World Trade Organization and take other countermeasures, but also left the door open to talk.
Canada said she would take legal proceedings under the appropriate international bodies to challenge the tariffs.
Car manufacturers would be particularly strenuously affected by new tariffs on vehicles built in Canada and Mexico, which burden the huge regional chain of supply in which parts can cross the boundaries several times before the final assembly. Ford and General Motors shares fell 4 percent to 5 percent.
Stocks in Volkswagen, Porsche, Stellantis and Daimler Truck fell on Monday by about 5 percent to 6 percent in European trading.
Analysts at the Stifel Investment Bank estimated that 8 billion euros ($ 8.2 billion) would affect VW -A € 16.5 billion (16.5 billion USD) on Stellantis.
