Those decreed this Saturday by Donald Trump have caused an earthquake in financial markets. Since the opening of the negotiation tables in Asia, the dollar has shot in front of the main currencies and approaches parity with the euro. The Canadian dollar has fallen to a new historical minimum compared to the American currency, while the Mexican peso depreciates to its lowest level from 2022, while world bags fall. From the Asians, passing through the European ones, who started the day with, to those of the United States, where the S&P marks a decrease of more than 1.5%. Petroleum, meanwhile, has increased while uncertainty and the greatest risk aversion have caused falls of more than 20% in some cryptocurrencies.
Investors and analysts try to fit that raises the beginning of a commercial war by the president of the United States, who has already had a response from those affected, but that threatens to extend to more products and regions. As part of the most outstanding protectionist on the United States in more than a century, Trump plans to start imposing tariffs on the importation of oil, semiconductor chips, aluminum, steel and pharmaceutical products from this same month. In its road map, in addition, there is the imposition of universal tariffs.
There is on the one hand, it is a commitment to a readjustment in the real exchange relationship. That is, the imposition of tariffs weakens the demand for products from Mexico and Canada and with it, the economies of those countries. They are expected to recover competitiveness via exchange through the adjustment in the parity of their currencies. On the other hand, tariffs threaten to have inflationary effects, which can force the Federal Reserve to maintain the highest interest rates for a longer time, expanding the gap with the types of the European Central Bank and making investments relatively more attractive dollars The types of the United States Treasury debt in the short term increase their profitability on Monday. To the adjustment of the exchange ratio and the perspective of higher types the role of the dollar is added as a refuge currency in times of turbulence.
Trump will talk to Trudeau and Sheinbaum
With all these ingredients, the price of the European currency touched early on Monday the $ 1,014 per euro, the largest closeness to parity since November 2022, when the price of the dollar came to exceed that of the euro, before Recover some breath and mark 1,023. The fall is still 1%. The American currency has been in equivalent to 1.47 Canadian dollars, which is a historical minimum for the northern neighbor’s currency and a fall also in the 1%environment. The dollar also marked a maximum against the Chinese Yuan, in 7.35 yuan per dollar. And in the case of Mexico, a dollar changed this Monday for 1,2125 Mexican pesos, so the currency of the country presided by Claudia Sheinbaum is at its lowest level since 2022, the currencies of Emerging markets as disparate as Colombia, Taiwan or Eastern Europe.
Trump announced this Sunday to the journalists who will speak on Monday morning with the Canadian Prime Minister, Justin Trudeau, and with the president of Mexico, Claudia Sheinbaum, the eve when 25% tariffs on their products enter into force. “I will talk to Prime Minister Trudeau tomorrow morning and I will also talk to Mexico tomorrow morning. And I don’t expect anything very dramatic. We have put tariffs. They owe us a lot of money and I’m sure they will pay, ”Trump said.
When asked what Canada and Mexico have to do to lift tariff An economic war. “They have to balance their trade, number one. They have to prevent people from entering our country, and we have prevented it. They have not prevented it. We have done it. They have to stop the entry of people, and we have to stop the fentanyl. And that includes China, ”he answered.
Strong punishment for export companies
In Asian bags, the first to operate when it was still Sunday in the United States and early Monday in Spain, exporting companies have suffered strong punishment, especially those with investments in Canada and Mexico from which they accessed the US market, but also others that can be affected by future tariffs. Samsung Electronics has yielded 2.7%, around the lowest level since mid -2020. Samsung, one of the main chips providers, assembles in Mexico some of the appliances that exports to the United States. LG Electronics, which also mounts in Mexico some appliances, as refrigerators, has fallen 7.1%, to its lowest level since October 2022.
The KIA automobile manufacturer, which has a plant in Mexico, has fallen 5.8% and its HL provider, up to 7.4%. LG Energy Solution, which operates a joint company of batteries modules with Stellantis in Canada, has collapsed 4.4%. On the other hand, Posco Future M, which invested in a company joint with GM in Canada to produce materials for electric vehicles, has sunk 9.7%, at its lowest level since August 2022. Toyota, Honda and Nissan have yielded between 5% and 7% in the Tokyo Stock Exchange, whose Nikkei index has subtracted 2.7%. The US market is important for these companies, which export there cars and components from Mexico.
The Australian stock market has also opened with strong falls, dragged by mining companies such as BHP and Rio Tinto, which can be directly and indirectly affected by Trump’s tariffs. The quotes of metals and raw materials quoted down due to the risk of lower world growth. In Taiwan it has been the collapse of the Microprocessor manufacturer TSMC (-5.7%) that has caused a dropout of the stock market index of more than 3.5%. The Hong Kong bag has opened with its greatest fall in a month in its first session of the year of the snake, the new Chinese year.
European markets have opened hours later, with some less pressure, as futures anticipated falls of more than 3%. Finally, the EURO STOXX has started with decreases from 2% focused on the motor sector and exporting companies. Trump assumed on Friday that there will be tariffs for the euro zone and that will arrive quite soon and this Sunday has insisted on it: “Definitely, it will happen with the European Union, I assure you, because they have really taken advantage of as I said. You know, we have more than 300,000 million dollars of deficit. I would not say that there is a calendar, but it will be very soon, ”he told reporters. At the moment, it excludes from the threat to the United Kingdom. European export companies can accuse the coup, but also others with strong interests in Mexico, such as the BBVA, leader of the country’s banking sector,
The S&P 500 when the White House confirmed that Trump would impose tariffs on Saturday. Futures on the index showed at the start of the week fallen from more than 1.5%. In the reopening of US markets, it will be necessary to be especially as General Motors and Ford, whose supply and production chains are largely integrated with neighboring countries. Tesla and Rivian electric cars manufacturers can also suffer.
Oil and cryptocurrencies
Oil also rises strongly at the start of the operations of the week. The West Texas Intermediate (WTI), the US reference, rose 3.7%, up to $ 75.18 a barrel, while the Brent crude earnings were close to 2%, up to about 76 dollars. The potential distortions in the American crude oil market and refined oil products have caused the differential between the Brent and the WTI to narrow. Futures about gasoline in the New York market have come to rise more than 6%.
In principle, it is those possible disruptions introduced by tariffs (which in the case of Canadian energy are 10% and that of the Mexican, of 25%) that explain the temporary increase. However, if the commercial war that has just begun slows the global economy, a lower demand and a fall in oil prices can be expected.
Cryptodivisas have not been freed from the seizure either. Ether, the second digital asset by market value, fell more than 26% in the opening, before reducing their losses. The Bitcoin suffered setbacks of more than 5% and other cryptoactives also retreated in the opening of Asian markets.
South Africa and Panama
Trump’s capacity to move the market has also been demonstrated outside the tariffs. The price of South African Rand falls strongly after criticism from the president of the United States: “In South Africa, terrible things are happening. The leaders are doing terrible, horrible things. So that is being investigated at this time, we will make a determination, at the time we find out what South Africa is doing. They are removing land, they are confiscating land and are actually doing things that are perhaps much worse than that, ”he said.
For its part, the price of the Chinese conglomerate CK Hutchison has fallen to its lowest level since last July after the United States Secretary of State, Marco Rubio, asked the Panamanian government to expel the companies linked to China They are near the Panama Canal. A CK Hutchison subsidiary that has two of the five adjacent ports. Panama has promised Rubio not to renew the agreements with Chinese companies and has also offered him free step without tolls for US warships.
