President Donald Trump, since his inaugural ceremony as the 47th president of the USA has implemented significant tariffs on Russia, Colombia, Canada, Mexico, and China to address ongoing disagreements. These tensions are impacting the global stock market and underscore the need for careful negotiation to stabilize financial systems.
The Global Crash
These massive export-import tariff changes have significantly affected the global stock market, a drop is seen in US indices. The Indian market benchmarks plunged including the Nifty, Sensex on Monday morning, caused by the Asian stock market decline. The NSE Nifty has fallen 243 points reaching, 23,239.25 and on the other hand, BSE Sensex has dropped down to 76,774.05 points at 731.91 points.
At the market opening, Taiwan’s Taiex dropped by 4.4%, with TSMC seeing a significant decline of 6%. Similarly, Korea’s Kospi decreased by 2.4%, and Japan’s Topix index fell by 2.3%. Hong Kong has opened with the index Hang Seng at 0.9%, Meanwhile, China’s stock markets are closed for the Lunar New Year holidays.
After experiencing a hike, due to the global stock market crash, the Australian ASX200 has cut down to more than 2%, and Rio Tinto and BHP have experienced degradation.
The Dollar power
“It will definitely happen with the European Union; I can tell you that.” Said Trump when reporters asked about the US president’s next target to impose tariffs, in a press conference. Since then, the Euro has plunged to 2.3% to $1.0125.
The Canadian Dollar, previously the strongest currency until 2022, has declined against the US Dollar, The Canadian dollar has weakened to 1.4%, and the Chinese 7.2552 yuan has lost in front of 0.7% hiking US dollar, which was one of the most traded offshore currencies. The Mexican peso increased by 2.7%, reaching a value of 21.40. The drop in cryptocurrency has been seen, with Bitcoin decreasing to 4.4% and Ether dropping to 15%.
Retaliation from Targeted countries
The tariffs on Canada, Mexico, and China have resulted in retaliations in the form of countermeasures against US goods. Mexico is acting out against dairy products, bourbon, and American-made steel with that the country is coming up with accounts of non-confrontation by saying, “Problems are not resolved by imposing tariffs, but by talking.”
Canada will be imposing 25% tariffs on US imports (adhering to CUSMA regulations) worth $30 billion. The tariffs will be implied on everyday items, the Canadian premier explained saying, “Like the American tariffs, our response will also be far-reaching and include everyday items such as American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes. It’ll include major consumer products like household appliances, furniture and sports equipment, and materials like lumber and plastics, along with much, much more,”
China is filing a lawsuit against the tariffs imposed by the US with the World Trade Organization, calling it a “serious violation” of the global trade rules. The lawsuit is filed to “safeguard its own rights and interests,”
Repercussions
The effects of these tariffs on countries like Mexico and Canada can result in economic recessions.
Haripriya Mishra is a journalist deeply interested in world news and geopolitics. She likes to explore the complexities of global affairs and strives to bring clarity to these issues through thoughtful journalism. Through her writing, she intends to raise the right questions, fostering informed discussions about national and international matters. Haripriya aims to use journalism as a platform to connect with people, share diverse perspectives, and contribute to a deeper understanding of global issues. She is committed to producing content that is accurate, ethical, and impactful. She enjoys creative writing and reflecting on the nuances of media and storytelling.
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