Donald Trump’s pledge to introduce 25% import tariffs on products from Mexico and Canada, and 10% from China, has caused global stock markets to react unfavorably. This situation has led to an increase in the US dollar, but decline in shares and European stock markets, as investors are concerned about the consequences of Trump’s tariff statements. Copper prices have also decreased because of a stronger US dollar and Trump’s promise to impose additional tariffs on Chinese products.
According to a report by ING, if all new tariff-rates are fully passed onto consumers, Americans will face an extra $2,400 per year for goods. ING also notes that potential labor shortages due to Trump’s immigration policies could lead to a 1% increase in US inflation. James Knightley, ING’s chief international economist for the US, commented on the situation