The Trump Tariff Threat Causes the Relief Rally to Fray – Europe Market Wrap

Traders tempered a relief rally that had buoyed Treasuries and global markets earlier this week, as Trump threatened additional tariffs and heightened fears about his “America First” agenda.

Treasuries and US stock futures traded slightly changed after recovering from previous losses. The Dollar, which is regarded as a beneficiary of isolationist policies, soared.

Trump promised to levy an additional 10% tax on Chinese imports and a 25% tariff on all items from Mexico and Canada. He stated that the restrictions are required to stop migrants and illegal substances from crossing the US border.

The Canadian Dollar plunged to a four-year low following the news, while the Mexican Peso traded near its lowest level since 2022. Europe’s Stoxx 600 equity index down 0.6%, with Stellantis, which manufactures autos in Mexico, falling 4.7%.