US dollar climbs after Trump promises reciprocal tariffs

On Air Force One, the US President told reporters that more tariffs are coming.

He said he will announce 25% tariffs on all imports of steel and aluminum on Monday. That’s a legitimate threat and something he has the power to do under current investigations/statues under Section 232. I don’t doubt that’s coming.

He also said he would announce reciprocal tariffs on Tues/Wed on countries that tax US imports with them going into effect ‘almost immediately’. That authority is highly quesitonable, particularly against countries with trade agreements with the US.

German Chancellor Scholz was asked about those tariffs and said they could retaliate “in an hour”.

As for the market reaction, it’s seen the US dollar climb 30-50 pips on various crosses, with commodity currencies suffering the most. That measured response may reflect some skepticism that they will actually be imposed.

Here is AUD/USD, which is now down 30 pips on the day.

This article was written by Adam Button at www.forexlive.com.