Donald Trump is set to impose new tariffs on imports to the US “immediately” on Wednesday, as announced by the White House. This move has caused concern among investors and raised the possibility of a global trade war.
Trump spent hours in discussions with his advisors on Tuesday ahead of what he calls “liberation day,” where he will unveil new reciprocal tariffs on foreign countries. The uncertainty surrounding his announcement has led to increased volatility in the markets.
Investors are feeling anxious about the potential impact of the tariffs on the US economy. Despite warnings, Trump seems determined to proceed with his plan to increase duties.
White House press secretary Karoline Leavitt confirmed that the tariffs will take effect immediately and downplayed the market’s reaction, stating that the focus is on ensuring Americans benefit from the tariffs.
Trump’s tariff threats have caused fluctuations in the markets, with JPMorgan’s fixed-income team acknowledging the uncertainty surrounding the president’s announcements.
Global markets have reacted to the news, with stock markets falling and the yield on the 10-year Treasury rising. Investors are cautious about making bold moves given the unpredictability of Trump’s decisions.
While some investors have capitalized on the volatility, many are hesitant to make significant investments. The purpose and extent of the tariffs remain unclear, adding to the uncertainty in the markets.
Market volatility indicators have increased in anticipation of Trump’s announcement, with measures of turbulence in equity markets and the Treasury market reaching elevated levels.
Despite the heightened uncertainty, investors are preparing for potential market fluctuations following Trump’s announcement. The derivatives market is also showing little additional risk around April 2.
As investors brace for the impact of the tariffs, there is a sense of caution and a recognition that Trump’s decisions could have significant repercussions.