Dollar climbs as Trump puts tariff threats back on the agenda
The dollar strengthened against all of its peers on Tuesday as comments from President Donald Trump and his Treasury Secretary stoked concern about widespread U.S. trade tariffs.
The Bloomberg Dollar Spot Index rose as much as 0.5 per cent after Trump said he was considering universal tariffs on everything from steel and copper to semiconductor chips. The euro fell as much as 0.7 per cent, while the yen lost nearly one per cent.
The moves follow weeks of back and forth over the scope of potential tariffs, with Bloomberg News reporting earlier this month discussions within Trump’s economic team about slowly ramping up levies. A report from the Financial Times late on Monday suggested that Scott Bessent, the new head of the Treasury Department, supports gradual universal tariffs starting at 2.5 per cent.
Trump later added he wants tariffs “much bigger” than 2.5 per cent and strongly suggested he could impose specific levies on automobiles from Canada and Mexico — countries that he’s already threatened with 25 per cent across-the-board tariffs as soon as Feb. 1. His remarks follow a brief trade spat with Colombia, which had already put the trade debate front and centre this week.
“This raises the prospect of tariffs that will be around for some time, and that the threat to implement them is credible, and this will support the dollar,” said Nick Rees, head of macro research at Monex Europe.
U.S. Treasuries fell, paring a rally the previous day that had sent yields to the lowest levels this year. The 10-year yield rose three basis points to 4.56 per cent.
The dollar rally followed a wild day for global markets, after progress on a Chinese AI model wiped US$589 billion from Nvidia Corp.’s market capitalization and fuelled
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