On April 2, 2025, U.S. President Donald Trump announced a sweeping new tariff regime aimed at rebalancing America’s trade relationships. Speaking from the White House Rose Garden, he introduced a baseline 10% tariff on virtually all imported goods, alongside reciprocal tariffs targeting more than 60 countries that maintain high trade barriers against U.S. exports.
These reciprocal tariffs are designed to reflect each country’s own trade restrictions. According to Trump, they will be set at half the rate of the total tariffs and non-tariff barriers those countries impose on U.S. goods.
Implementation dates:
• The 10% baseline tariff on general imports takes effect Saturday, April 5 at 12:01 AM ET.
• Reciprocal tariffs on the so-called “worst offenders” will begin Wednesday, April 9 at 12:01 AM ET.
• The 25% tariff on all foreign-made automobiles takes effect tonight at midnight (April 3 at 12:00 AM ET).
Table of contents
Reciprocal tariff rates
Trump’s Message: Economic Sovereignty
Trump framed these measures as a long-overdue correction to decades of unfair trade practices, stating:
“Today we’re standing up for the American worker, and we are finally putting America first. This is our declaration of economic independence.”
The administration says the revenue from tariffs will be used to reduce taxes and pay down the national debt, while also aiming to revive domestic manufacturing. However, the move risks sparking a new global trade war and may push inflation higher—two dynamics that would deeply affect the forex market.
Forex Market Impact: Volatility Ahead
USD (U.S. Dollar)
The dollar may initially strengthen due to safe-haven flows and higher interest rate expectations. However, if tariffs lead to slower growth or retaliation from key partners, the dollar’s strength could fade in the medium term.
CNY (Chinese Yuan)
Facing the steepest tariffs, the yuan is likely to weaken. China may respond with policy easing or counter-tariffs, adding downside pressure to the currency and increasing regional tension.
EUR and GBP (Euro and British Pound)
Both currencies could come under pressure due to their exposure to global trade. The eurozone and UK are heavily reliant on exports to the U.S., and these tariffs may hurt industrial output and consumer sentiment, forcing central banks to remain dovish.
JPY (Japanese Yen)
As a safe haven, the yen could strengthen in the near term. However, with Japan also facing reciprocal tariffs, the longer-term picture is more uncertain—especially if trade disruptions hit Japan’s export engine.
AUD and NZD (Australian and New Zealand Dollars)
Both currencies are highly sensitive to global trade sentiment. With demand from Asia potentially falling, and commodities under pressure, AUD and NZD may face sustained downside in a prolonged trade conflict.
A Turning Point for Global Trade
Trump’s reciprocal tariff policy represents one of the most aggressive trade actions in modern U.S. history. For the forex market, it signals the beginning of a period of heightened volatility, risk repricing, and diverging monetary responses.
Traders should be prepared for sharp movements across major currency pairs and commodities. As the situation evolves, fundamental analysis will be critical to identifying which trends are sustainable and which are short-lived reactions to a rapidly shifting global landscape.
Author
Rutger Lokin is a seasoned market analyst and co-founder of The Trading Academy, with 7 years of experience trading both technically and fundamentally, grounded in macroeconomics. Holding a bachelor’s degree in Computer Science and Economics, Rutger combines analytical precision with economic insight. His dual proficiency in technical analysis and fundamental economic drivers provides uniquely sharp perspectives on market trends and dynamics. Rutger leverages this expertise to excel in navigating the complexities of the financial markets.
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