Trump’s Tariff Bombshell Shakes Markets, Sends Dollar Reeling

The US dollar is showing signs of weakness as President Donald Trump’s new round of tariffs disrupts global trade flows and rattles investor confidence. The surprise decision to slap import duties on several major trade partners has led to turbulence in financial markets, with the effects being felt across currencies, bonds, and equities, according to a recent report by Reuters.

This week, the Dollar Index slipped below the key 100 mark—a clear signal that traders are growing uneasy. Market analysts suggest the drop reflects mounting concerns about America’s trade direction and the possibility that ongoing disruptions could slow economic momentum. Adding to investor jitters, yields on 10-year US Treasury bonds jumped, suggesting a move away from traditional safe-haven assets.

Also Read: China Claps Back, Hikes Tariffs on US Goods To 125% After Trump’s 145% Levy — No End in Sight to Trade War | Republic World

The fallout isn’t limited to the United States. Stock markets across Asia registered declines, while the Indian rupee touched a record low. North American currencies such as the Mexican peso and Canadian dollar also lost ground. In contrast, investors sought refuge in the Swiss franc and the euro, both of which posted gains, reflecting a broader shift in sentiment.

The tariffs come at a delicate point in the global recovery, with many economies still finding their footing after the pandemic. Economists warn that added trade barriers could push up costs for companies dependent on imports and supply chains—costs that may eventually be passed on to consumers. This raises the risk of inflation rearing its head again, just as central banks had started to ease back on rate hikes.

There’s also growing concern about possible retaliation from affected countries, which could hurt American exports and further strain diplomatic ties. For a country that relies heavily on foreign capital, this kind of policy unpredictability could be damaging.

With foreign investors holding trillions in US assets, any erosion of trust in America’s economic direction could have lasting consequences. For now, all eyes are on Washington and the global response to what is shaping up to be a volatile chapter in international trade.