Stock Markets React Cautiously to Trump’s Tariff Plans
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After President Donald Trump mentioned he might put new tariff on goods from Mexico, Canada, and China, stock markets in Asia went up a little on Tuesday. Trump promised a “golden age” for America in his speech when he started his term, and this helped calm the markets. European stocks didn’t change much.
Trump has plans to change trade rules, lower taxes, and reduce government rules. These could help businesses make more money. But, experts say these plans could also make things cost more, which might make the Federal Reserve raise interest rates.
Trump said, “We’re thinking about a 25% tariff on Mexico and Canada because they let too many people and drugs come into the U.S.” He also said that whether he puts tariffs on China might depend on what happens with TikTok, and blocking a deal would be seen as unfriendly.
Trump also said he isn’t ready to put tariffs on everything coming into the U.S. yet. During his campaign, he wanted to put a 10% tariff on all imports and a 60% tariff on goods from China.
He wants to start a new “External Revenue Service” to collect all money from tariffs and foreign sources. Some people worry that these tariffs will make things more expensive for Americans, but Trump thinks they will help make Americans richer.
‘Market sentiment dented’
Stocks in Asia like Hong Kong’s Hang Seng went up by 0.9%, and Japan’s Nikkei 225 increased by 0.3%. The U.S. dollar got stronger against other big currencies like the pound and the euro.
Oil prices went down because there might be more oil available, and Bitcoin prices went up because Trump supports cryptocurrencies.
Market experts think Trump’s return could make the markets unpredictable again. “The first few hours have shown that we’re entering a dynamic policy environment,” said Charu Chanana from Saxo Bank.
Trump’s advisor, Judy Shelton, said Trump wants to give more power to people by lowering taxes and cutting rules. She said tariffs are a good way to deal with immigration issues with Mexico and Canada and might not make things more expensive for Americans.
The U.S. markets were closed for Martin Luther King Jr. Day, so we’ll see more reactions when they open again.