Markets Expect Trump's Latest China Tariffs to Backfire as Gold Jumps and Dollar Plunges
In a move that has sent shockwaves through global markets, President Donald Trump announced on Friday the imposition of an additional 10% tariff on Chinese goods, effective immediately. The surprise decision has sparked widespread concern among investors, with many predicting that the US will bear the brunt of the tariffs.
Market Reaction
The S&P 500 plummeted 2.7%, its worst selloff since April 10, as traders scrambled to adjust their portfolios. The US dollar index tumbled nearly 0.7% as Treasury yields fell, while gold prices surged more than 1.5%. "Markets are again thinking that the US holds the shorter straw in the tariff fight with China," warned Robin Brooks, a senior fellow at the Brookings Institution.
Timeline
Friday: President Trump announces additional 10% tariff on Chinese goods
Immediate impact: S&P 500 sinks 2.7%, dollar index plunges nearly 0.7%
Gold prices surge more than 1.5%
Background Context
The latest tariffs are the latest salvo in a trade war that has been escalating between the US and China for months. The move is seen as an attempt to pressure Beijing into making concessions on trade, but many analysts believe it will ultimately harm American businesses and consumers.
What Happens Next
As markets continue to grapple with the implications of Trump's decision, investors are bracing themselves for further volatility in the coming days. With the US economy already showing signs of slowing down, the additional tariffs could exacerbate the situation, leading to a recession. The question on everyone's mind is: will Trump's gamble pay off, or will it ultimately backfire?
*This story is developing. Information compiled from Fortune reporting.*
