Yesterday, President Donald Trump’s statements about new commerce tariffs had been largely ignored by greenback patrons. Nonetheless, risk-asset sellers had been additionally notably absent.
Throughout his speech, Trump introduced that he would seemingly impose tariffs on imported vehicles, semiconductors, and pharmaceutical merchandise, with charges anticipated to be round 25%. These tariffs are prone to take impact on April 2. Whereas such a transfer would escalate the continued commerce struggle, the market confirmed little response.
It’s value recalling that Trump had beforehand introduced 25% tariffs on metal and aluminum, set to take impact in March. “I will in all probability let you know on April 2, however it should be someplace round 25%,” Trump advised reporters at his Mar-a-Lago membership when requested in regards to the deliberate auto tariffs.
Concerning tariffs on prescribed drugs and semiconductors, Trump acknowledged: “The tariffs shall be 25% or larger, and they’re going to enhance considerably over the yr.” He defined that he needs to present corporations time to regulate earlier than introducing new import taxes. “Let corporations come to america and open their factories right here, after which there will not be any tariffs,” Trump added.
Impression on the Auto Business
Specialists warn that new auto tariffs may have widespread penalties for the trade. Final yr, round 8 million vehicles and light-weight vehicles had been imported into the US, accounting for almost half of all automotive gross sales.
Main European automakers, together with Volkswagen AG, in addition to Asian producers like Hyundai Motor Co., will seemingly be among the many hardest hit.
Trump didn’t specify whether or not these measures would goal particular nations or apply to all imported autos. It is usually unclear whether or not vehicles produced below free commerce agreements with Canada and Mexico could be exempt.
For Mexico and South Korea, the place auto exports to the US make up 2.4% and 1.8% of GDP, respectively, Trump’s new tariffs pose a severe financial problem.
Impression on the Semiconductor Sector
Within the semiconductor sector, Malaysia and Singapore are anticipated to be among the many hardest-hit nations. Malaysia, the sixth-largest exporter of semiconductors, recorded $136 billion in semiconductor exports in 2024.
Representatives from Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. declined to touch upon the brand new tariffs.
Potential Retaliatory Measures
Not too long ago, US buying and selling companions have vowed to reply swiftly to Trump’s tariffs, warning that they may goal politically delicate US-made items.
A prime European Union commerce official is anticipated to journey to Washington this week for last-ditch talks geared toward avoiding the April tariffs. Nonetheless, Trump has made it clear that no nation will be capable of negotiate its method out of the tariffs if he considers commerce relations to be imbalanced.
EUR/USD Technical Outlook
Proper now, EUR/USD patrons have to push the value above 1.0475. This can open the best way for a check of 1.0510. Breaking above this degree may result in an advance towards 1.0554, although attaining this with out help from main gamers shall be difficult. The long-term goal stays 1.0590.
If the pair declines, severe shopping for curiosity is anticipated round 1.0430. If patrons fail to emerge at that degree, a drop to 1.0400 and even 1.0370 may very well be on the horizon.
GBP/USD Technical Outlook
For GBP/USD patrons, the important thing degree to interrupt is 1.2630. Efficiently overcoming this resistance may result in a check of 1.2665, although additional positive factors past this level could be troublesome. The ultimate goal stands at 1.2690.
If the pair falls, bears will try and regain management at 1.2590. A break under this vary would critically weaken bullish positions, pushing GBP/USD towards 1.2550, with a possible transfer right down to 1.2515.