China responds to Trump's tariffs
In response to Donald Trump’s initial trade war tariffs, China has retaliated by targeting several US companies and imposing levies on some US goods, aiming to avoid further escalating tensions between the world’s two largest economies.
On Tuesday, Beijing introduced a 15% levy on less than $5 billion worth of US energy imports and a moderate 10% tax on American oil and agricultural equipment, just as new US tariffs took effect. Additionally, China announced it would investigate Google for alleged antitrust violations, despite the fact that Alphabet Inc.’s search services have been unavailable in the country since 2010.
President Xi Jinping’s response seems carefully measured to prevent significant negative impacts on China’s economy while demonstrating that China has the capability to inflict damage on various fronts. This includes disrupting key mineral supply chains and negatively affecting US companies that have substantial operations in China.
Trump delays tariffs for 30 days
President Donald Trump has agreed to postpone the implementation of 25% tariffs on Canada and Mexico for one month. This decision comes after both neighboring countries committed to taking stronger measures to address migration and drug trafficking at the border, thus avoiding a continental trade war for the time being.
On Monday, Trump and Canadian Prime Minister Justin Trudeau announced this agreement through separate social media posts in the late afternoon, Washington time. The Canadian government made several concessions as part of the negotiations.
Trump expressed satisfaction with this initial outcome but indicated that challenging negotiations lie ahead. “I am very pleased with this initial outcome, and the tariffs announced on Saturday will be paused for a 30-day period to see whether a final economic deal with Canada can be structured,” the president stated, noting his aim to address the US trade deficit with Canada.
The US dollar index returned to Friday’s closing price
Despite the recent drama surrounding Trump, the US Dollar Index returned to its closing price from Friday. Earlier this week, it had reached 109.85 after Trump announced tariffs on Canada, Mexico, and China. It is evident that Trump is using these tariffs as a strategy to encourage negotiations with other countries, but whether this approach will be effective in the long term remains to be seen.
From a time and price perspective, the US Dollar Index chart has not shown significant changes. The bearish outlook for a short-term correction remains valid, particularly following the reversal candle observed yesterday.
OPEC+ maintains oil production plans
OPEC+ will not make any changes to its current oil production plans during a review meeting on Monday, despite President Donald Trump’s call for the group to lower crude prices. A panel of key members, led by Saudi Arabia and Russia, is set to continue the strategy of limiting crude supplies for the remainder of this quarter. They plan to gradually restore production in monthly increments starting in April, according to delegates. The coalition has been reducing output for over two years to avoid a surplus and has already delayed its production increase three times in an effort to stabilize prices.
Gold remains steady near record high
Gold prices remained steady near a record high following President Donald Trump’s announcement of 10% tariffs on Chinese imports, which increased demand for safe-haven assets. This escalation in the trade war with China comes on the heels of Trump’s previous threat to impose 25% tariffs on Canada and Mexico, although he later decided to pause those tariffs for a month. The bullion was trading close to its all-time peak of over $2,830 an ounce, reached earlier this week.
There is significant uncertainty about the future, which enhances Gold’s appeal as a reliable store of value in an unpredictable environment. The trajectory of the US dollar will also be crucial, as a strengthening dollar makes Gold more expensive for many international buyers.
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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