Trump plans to introduce reciprocal tariffs as early as April

President Donald Trump has instructed his administration to explore the implementation of reciprocal tariffs on several trade partners, signaling a potential shift in U.S. trade policy. The move aims to address what Trump perceives as an imbalance in global trade that puts the U.S. at a disadvantage.

On Thursday, Trump signed an order directing the U.S. Trade Representative and the Commerce Department to develop a strategy for imposing tariffs on individual nations. This process, intended to realign trade relationships, could take several weeks or months to finalize. Howard Lutnick, Trump’s nominee for Commerce Secretary, indicated that all necessary assessments should be completed by April 1, with the president ready to take action immediately thereafter.

These new import duties would be tailored to each country and designed to counteract not only existing tariffs on U.S. exports but also various non-tariff trade barriers. According to a White House memo, factors such as government subsidies, regulatory policies, value-added taxes, currency practices, and weak intellectual property protections could be considered when determining these tariffs. Markets responded positively to indications that the tariffs wouldn’t be enacted right away.

“In the interest of fairness, I will introduce reciprocal tariffs—matching what other countries impose on the United States,” Trump stated in the Oval Office. “In most cases, they charge us significantly more than we charge them, but that’s about to change.”

Additionally, Trump mentioned plans to introduce separate import taxes on automobiles, semiconductors, and pharmaceuticals at a later stage, beyond the reciprocal tariff measures.

Eurozone economy sees unexpected growth

Despite initial projections of stagnation, the eurozone economy managed to grow in the final quarter of last year, according to revised data from Eurostat.

The European Union’s statistics agency reported on Friday that gross domestic product (GDP) increased by 0.1% from the previous quarter, an upward revision from the zero growth initially estimated on January 30.

The improved figures reflect additional economic data from individual euro-area nations, including the Netherlands, the region’s fifth-largest economy, which expanded by 0.4%. However, the economic performance among the bloc’s major economies varied—Spain recorded a 0.8% growth rate, while Italy saw no change, and both Germany and France experienced contractions.

While the European Central Bank acknowledges continued economic challenges in 2024, it still anticipates a gradual recovery, forecasting growth to accelerate to 1.1% from last year’s 0.7%. Weak economic activity remains a key argument for officials advocating further interest rate cuts.

Geopolitical uncertainty also presents a challenge, with the possibility of new U.S. tariffs on European goods adding to concerns. Trump’s recent directive to evaluate reciprocal tariffs, alongside potential additional duties on auto imports, could particularly impact Germany’s automobile sector.

DXY fails again

Despite various fundamentals, including higher inflation and Trump’s decisions—which have kept inflation expectations elevated—the US Dollar has failed to rally. Instead, it has declined further, breaking through multiple support levels and reaching as low as 106.83 earlier today. This decline is not surprising, as we mentioned at the beginning of January when the time/price method indicated that the dollar had peaked. Going forward, the downward pressure is likely to persist, with 106.40 now being the next key level to watch.

Silver soars

Silver experienced a significant advance during the European session today, breaking above the solid resistance level of 32.50 and reaching as high as 32.27 at the time of this report. This marks the highest level for silver since November of last year, reaffirming its bullish outlook. A weekly close above 32.50 would suggest that any potential downside retracement would be limited above this broken resistance. On the upside, $34 could be the next level to monitor.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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