Trump's new tariffs, the dollar may fall

During his campaign, Trump proposed a 10-20% tariff on all imported goods, with a 60% tariff specifically on Chinese products.

Recent reports indicate that Trumps team is working on a new tariff plan, aiming to impose import duties on certain goods from around the world. This plan is different from the “universal tariffs” that Trump suggested during his campaign, and the specific goods or industries that will be affected have not yet been disclosed.

The tariff policy Trump proposed during the election primarily aimed to protect U.S. domestic manufacturing, reducing competition from low-priced imports. This policy was closely tied to Trumps campaign promises and helped garner support from voters. Additionally, the revenue generated from tariffs could offset potential tax losses from other tax cuts.

However, Trump has denied reducing the intensity of the new tariffs, leading to a drop in the dollar during volatile trading, with the dollar index falling by 0.7% to 108.23.

It remains unclear whether Trump will change his mind, and the tariff policy is still being adjusted, with no final decisions made yet.

One reason for considering adjustments to the “universal tariff” is that such a policy could provoke a strong reaction from U.S. consumers and businesses. If prices on everyday items like food and consumer electronics rise, it could lead to public dissatisfaction.

Trump's team is clearly aware that widespread tariffs could trigger retaliation from international trade partners, further intensifying global supply chain uncertainty and increasing costs for U.S. businesses and consumers.