- US dollar falls As President Donald Trump launches his tariffs and he plunged after he introduced much more steep than expected on the Day of Liberation. This is contrary to the fact that the markets were waiting before it started its trade war. The weaker green appeal makes imports more expensive, adding the costs of aggressive Trump import taxes.
President Donald Trump’s tariffs cut the dollar, without giving the expectations of a stronger green appeal and adding to the price that Americans will pay after tax transfer.
This year, the US dollar index, which tracks the green shell in the basket of other global currencies, has fallen 4.7%, as investors are increasingly prices in the economic impact of the expanded array of duties.
After the introduction of tariffs on China, Canada, Mexico, St., aluminum and Auto earlier this year, Trump shocked the world markets on Wednesday fresh tariffs on almost every trading partner, which was much more steep than expected.
Fitch rating estimated that the total effective tariff rate will be about 25% – –the highest since 1909—Am for a preliminary estimate of 18% or more than 10 times last year 2.3%. As a result, economists are jpmorgan raised the chances of recession up to 60% from 40%.
A “Liberation Day” The announcement sent the dollar index, which crashed by more than 2%, marking its worst one -day losses for almost 10 years, overcoming an earlier decline, since the stable drops of previous tariffs blurred views on the US economy and US assets.
But it shouldn’t have been. During the presidential campaign and subsequently, Wall -Rate “Trump Trade” He turned on the rate that the tariffs tilt the balance and import balance in favor and the dollar is raising. Instead, the actual tariffs that Trump submitted “American exclusivity” What the US economy and financial markets once boasted.
Companies are expected to absorb some tariff costs and transfer the rest consumers. According to some estimates Added the cost of car tariffs only May increase prices by $ 5,000-10,000 per vehicle.
Meanwhile, former Finance Minister Larry Sammers said the overall net impact Tariffs will cost family of four about $ 300,000.
In addition, the weak dollar will lead to even higher import prices from some countries. For example, a $ 50,000 car will lead to approximately $ 55,000 at $ 1.095 for the euro on Friday – before the tariffs are taken into account.
This prize is about $ 4,000 more than in early January, when Trump’s trade was at the peak, and the exchange rate was $ 1.02 per euro, and investors suggested that parity may even be possible.
On the other hand, a stronger dollar will make imports cheaper. During the confirmation hearings in January for the Minister of the Treasury Scott Igred said The dollar can estimate by 4% In response to the tariff by 10%, “therefore 10% are not transmitted” consumers “.
For his part, Trump said last weekend that if the prices for foreign cars rise, then consumers will buy American cars as he gave up on problems This author will lead to the hike of car manufacturers.
“I would like it if they raise prices because people will start buying American cars,” he said inInterview with NBC NewsSaturday.
“I could care. I hope they raise prices because when they do, people will buy American cars. We have a lot.”
Originally this story was presented on Fortune.com
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2025-04-05 07:03:00
Jason Ma
