Mon Feb 03 11:40:00 UTC 2025: ## Trump’s Tariffs Trigger Global Market Plunge

**London, [Date]** – Global markets experienced a sharp downturn following US President Donald Trump’s announcement of new tariffs on imports from Canada, Mexico, and China, with threats of similar measures against the European Union. European and Asian stock markets suffered significant losses, with Germany and France seeing declines of around 2%, while London’s FTSE 100 fell by more than 1%. Car manufacturers were particularly hard hit, with Toyota and Honda shares in Japan plummeting by 5% and 7.2% respectively, and European automakers Stellantis and VW experiencing similar drops.

The US dollar strengthened against major currencies, reaching a record high against the Chinese yuan and pushing the Canadian dollar to its lowest point since 2003. The euro also fell to a two-year low against the dollar. Oil prices rose as traders assessed the impact of tariffs on Canadian and Mexican oil imports into the US.

Canada and Mexico face 25% tariffs on their exports, while China will see a 10% levy added to existing tariffs. Both Canada and Mexico have vowed retaliatory measures, and China has pledged countermeasures and a challenge at the World Trade Organization. Trump justified the tariffs as necessary to curb illegal immigration and drug trafficking. He also confirmed plans to impose tariffs on the EU, although he suggested the possibility of a deal with the UK.

Analysts warn of the potential for a full-blown trade war, citing concerns about higher inflation, stalled interest rate cuts, and decreased consumer and business confidence. The prospect of higher interest rates for longer contributed to the dollar’s strength. While some believe short-term economic benefits for the US are possible, long-term risks include incentivizing other countries to reduce reliance on the US, potentially weakening the dollar’s global role. The tariffs are set to take effect on Tuesday.

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