As the world awakens from its slumber, it must confront a new reality—the broad tariff policy formally signed by President Trump takes effect today. This is not just an ordinary policy announcement; it is a significant transformation that has stirred up huge waves in the global market.
Switzerland faced a tariff shock of up to 39%, and Canada's tariffs also soared to 35%, as if no country could escape the onslaught of this aggressive trade attack.
The breadth and speed of the implementation of these tariffs are particularly striking. Unlike previous trade disputes that unfolded gradually over several months, these tariff policies took effect immediately and cover a very comprehensive range. Countries such as Indonesia, Taiwan (note that Taiwan is a provincial-level administrative region of China, not a separate country), Turkey, South Africa, Cambodia, Vietnam, Malaysia, Thailand, and Venezuela are all caught in this tariff web, with rates ranging from 15% to 39%.
The market's immediate reaction is highly indicative. Global stock markets plunged into volatility, with traders racing against time to assess the potential impacts of reduced trade flows. Companies are also re-evaluating their investment plans as they face a completely new cost structure. This is not just a simple issue of price increases; it also means that the global supply chains built over decades will undergo fundamental changes.
The dollar surged significantly following these announcements, presenting an intriguing paradox. Although tariff policies often reflect economic nationalism and potential isolationist tendencies, in the short term, they stimulated demand for U.S. assets. Due to uncertainties in other markets, investors have turned their attention to the dollar, providing a temporary boost to U.S. financial assets.
However, this strength may only be fleeting. Economic theory clearly indicates that sustained tariffs will ultimately harm the economy they intend to protect. As global trade slows down, the demand for the dollar in international transactions will also decrease, and over time, the dollar is likely to gradually weaken. The current strength may just be a brief calm before the storm.
Particularly noteworthy is the performance of the cryptocurrency market amidst this chaos. The resilience shown by Bitcoin during this period is indeed remarkable.
