US President Donald Trump announced a 30-day delay on imposing tariffs on imports from Mexico and Canada, triggering a surge in global equity markets.
In a major policy shift, US President Donald Trump on Tuesday declared a temporary halt to his proposed stiff tariffs on imports from neighboring nations, Mexico and Canada. The move resulted in an immediate rally in US equity futures and a reversal of gains in the Mexican peso and Canadian dollar.
US Markets Respond Positively
According to Reuters, the S&P 500 Futures rose 0.4% following the announcement, signaling investor confidence in the pause. Meanwhile, the euro experienced a volatile ride, initially dropping to $1.0125 before rebounding to $1.0320 within 24 hours.
Despite tensions between the US and Canada, Trump revealed via Truth Social that Canada had agreed to enhance border security and tackle the influx of fentanyl. The diplomatic progress helped stabilize North American trade relations, reducing market uncertainty.
Asian Markets See Gains; Hong Kong Up 2.5%
Hong Kong’s Hang Seng index surged 2.5%, with electric vehicle manufacturers leading the upward trend. Li Auto soared 8%, while semiconductor giant SMIC gained over 7%, hitting a record high.
Stock analyst Steven Leung from UOB-Kay Hian noted that Trump’s tariff threats leave space for negotiation, which has kept investor panic at bay. “It all makes us feel that it’s not a very firm policy yet. No need to worry too much,” he said.
European and Australian Markets Follow Suit
European equity futures recorded a modest 0.2% gain as investors remained cautiously optimistic. In Australia, stocks advanced 0.4%, while Japan’s Nikkei Index rose 1.7%, recovering from previous losses driven by trade war fears.
Chinese markets remained closed due to the Lunar New Year break, but offshore yuan strengthened, climbing back to 7.3112 per dollar from its weakest point of 7.3765 per dollar.
Oil and Bitcoin Volatility
Oil prices, which initially surged, later slipped, with Brent crude trading at $75.46 per barrel, hovering near a one-month low. Meanwhile, Bitcoin rebounded sharply, trading around $102,000, after sinking close to $91,000 the previous day.
Investment strategist Ross Mayfield from Baird in Kentucky emphasized that markets should prepare for continued policy uncertainty. “This kind of rollercoaster in public negotiations around tariffs and other policies is something we should get used to,” he said.
Gold Prices Near Record Highs Amid Tariff Concerns
Gold continued its bullish trend, trading at $2,820.69 per ounce as of 0252 GMT, nearing its record peak of $2,830.49. Market experts attributed the surge to ongoing US tariff concerns and inflationary pressures.
Additionally, Treasury futures declined slightly, reflecting investor uncertainty over whether the Federal Reserve will enact one or two rate cuts this year.
Conclusion: Market Optimism Holds Amid Uncertainty
While Trump’s tariff pause has given a short-term boost to global markets, the overall economic outlook remains uncertain. With ongoing geopolitical tensions, inflation concerns, and potential future trade negotiations, investors are advised to remain cautious and adapt to the shifting economic landscape.
Stay tuned for more updates on how these developments will shape global trade and investment opportunities.