Mon Feb 03 13:50:00 UTC 2025: ## Trump’s Tariffs Trigger Global Market Turmoil; Dollar Soars, Stocks Plummet

**New York, March 2, 2025** – Global markets plunged into turmoil this morning following President Donald Trump’s announcement of new tariffs on imports from Mexico, Canada, and China. The 25% levy on Mexican and Canadian goods and 10% on Chinese products, set to take effect tomorrow, sent shockwaves across the financial world, causing a sharp rise in the dollar and a significant drop in US stock futures. The threat of further tariffs against the European Union also looms, with Trump promising action “very soon.”

The dollar index (DXY) surged 0.33% to 108.15 points by 10:00 AM, reflecting its strength against a basket of major currencies. The Canadian dollar fell 0.97% against the US dollar, while the Mexican peso depreciated by 1.95%. In Brazil, the Real weakened by 0.34% against the dollar, mirroring the reaction in other emerging markets.

Canada’s Prime Minister Justin Trudeau immediately retaliated with 25% tariffs on American imports. Mexican President Claudia Sheinbaum, while adopting a more conciliatory tone, announced both tariff and non-tariff countermeasures and proposed a joint US-Mexico task force focused on public health and security. Trump’s actions are ostensibly aimed at achieving “trade balance” but are also linked to his criticism of the countries’ handling of immigration and drug trafficking.

The impact was felt strongly in Brazil, where investors reacted to the Central Bank’s Boletim Focus, which revealed a further deterioration in inflation expectations. This, coupled with concerns about the Central Bank’s commitment to its 3% inflation target, added to market volatility. Political uncertainty, highlighted by recent polls showing President Lula da Silva leading all opposition candidates, further contributed to the jittery atmosphere.

Friday’s market reaction in Brazil saw the Ibovespa index retreat, despite closing the month in positive territory. While the dollar initially weakened against the Real, closing its tenth consecutive daily decline, the global surge in the US dollar is expected to reverse this trend. The rising inflation expectations, as indicated by the Boletim Focus, show rising expectations for IPCA of 2025 (from 5.50% to 5.51%) and 2026 (from 4.22% to 4.28%). The situation underscores the significant uncertainty facing Brazilian markets.

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