Global financial markets experienced significant upheaval as Trump’s sweeping tariffs against major trading partners marked the beginning of what investors fear could be a prolonged trade war. The dollar index jumped 0.9% to near two-year highs as traders sought safety, pushing the Canadian dollar to its lowest level since 2003 and pressuring the euro toward parity. The market impact was broad and severe, with S&P 500 futures dropping 1.6%, European automakers tumbling more than 5%, and cryptocurrencies facing sharp selloffs. The tariffs represent the most extensive protectionist action by a US president in almost a century, prompting dire warnings from major financial institutions. Goldman Sachs warns of a potential 5% US stock market decline, while RBC Capital Markets suggests losses could reach 10%. Bloomberg Economics estimates the measures could reduce US economic growth by 1.2% while adding 0.7% to core inflation. The ripple effects extended to emerging markets and commodities, with the Mexican peso falling over 2% and oil prices surging on supply disruption fears, threatening higher gasoline prices for American consumers. Market analysts describe the move as a watershed moment, with XTB Ltd.’s research director comparing it to “crossing the Rubicon.”
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