U.S. dollar slides, Wall Street losses expected as global markets react to tariffs

President Donald Trump’s new tariffs caused a shock wave through the market on Thursday, with the dollar and U.S. stocks fearing the worst blow to the trade war that would spur the trade war in a fragile world economy.

Trump said he would impose a 10% benchmark tariff on all U.S. imports and higher tariffs on some of the country’s largest trading partners. New taxes for a trade war that began when Trump returned to the White House have accumulated, and he rocked the market with fears that these moves would trigger a sharp global economic slowdown and fuel inflation.

The stock market fell and investors rushed towards the relative security of bonds, gold and yen. S&P 500 futures fell 3%, indicating that investors were expected to lose money later that day when Wall Street opened.

The U.S. Treasury Department has produced a gliding, China’s yuan fell to a seven-week low, and the dollar has suffered huge sales pressure.

The U.S. dollar index measures the U.S. currency pairs of six more currencies, down 1.6% to 102.03, the lowest since early October. The U.S. dollar index fell more than 5.7% this year.

The euro is the largest component of the index, up 1.5% to a six-month high of $1.1021.

The yen rose to a three-week high against the dollar, lasting 1.7% at 146.76 per dollar, while the Swiss franc hit its strongest level in five months at 0.86,555 per dollar.

“It’s actually hard to see how other countries can make concessions to get the U.S. to raise these tariffs. I think that’s a big risk,” said Nicholas Rees, head of macro research at Monex Europe.

Large technology, retailers feel early pain

Apple sank 6.5%, hit by tariffs of 54% in total in China, which is the basis for most of Apple’s manufacturing industry. Microsoft fell 1.8%, NVIDIA fell 3.5%, and Amazon.com fell 5.1%.

“National screaming ‘negotiation strategy’ will remain ahead of the foreseeable future,” said Adam Hetts, global leader of multi-college and portfolio manager at Janus Henderson Investors.

Watch | Prices of new cars, auto parts are expected to rise:

25% tariff on braces in the automotive industry, other industries are already suffering

Canada’s automotive industry is having a potential impact on the 25% tariff in the U.S., while steel and aluminum manufacturers that have already been subject to tariffs are working hard and working to increase costs and losses in their businesses.

Retailers were hit hard on Thursday, with Lulemon falling 10.3%, Nike falling 8.3%, and Wal-Mart 6.2%, as Trump imposed some of the most punitive tariff rates on major production hubs including Vietnam, Cambodia, Indonesia and China.

The heavyweights in the automotive industry have also fallen – GM accounts for 2%, while Tesla is down about 5%.

Wall Street’s Fear Scale (CBOE Volatility Index) hit a three-week high with a rate of 25.64 points.

I’ve drawn the response

EU head Ursula von der Leyen described the tariffs as a major blow to the world economy and said if the conversation with Washington fails, a group of 27 members is ready to respond to the countermeasures.

Von der Leyen said the EU has entered into force on U.S. steel and aluminum tariffs, which have reached up to 26 billion euros ($28.4 billion in U.S. goods) in the medium term, and that tariffs have reached a maximum of 26 billion euros ($28.4 billion in U.S. goods).

“Now, we are preparing further countermeasures to protect our interests and business,” Von der Leyen said in a statement read out in the Uzbek City of Samarkand, ahead of the EU Central Asian Partners Summit on Thursday.

The EU also faces 25% U.S. tariffs on steel and aluminum, with auto parts facing vehicles starting Thursday and within a month, likely on auto parts.

French President Emmanuel Macron will host representatives of business units on Thursday that will be hit by new tariffs that apply from Saturday.