International News 04 February 2025
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Rupee Falls! Trump's tariff onslaught rattles Asian currencies
On Monday, the Indian rupee fell below US$87 for the first time in response to tariffs imposed by US President Donald Trump on major trading partners. This development has led to a strengthening of the US dollar and exerted pressure on emerging market currencies, such as the rupee. The rupee depreciated by 0.5% to 87.07, and analysts predict further declines throughout the day. Trump's announcement of tariffs on imports from Mexico, Canada, and China, which took effect on Tuesday, had an immediate impact on global financial markets. The US dollar index rose by 0.3% to 109.8, and Asian currencies experienced losses across the board. The offshore Chinese yuan, often used as a benchmark for the rupee, also dropped by 0.5% to 7.35 per US dollar.
Trade war flares up after Trump announces import tariffs
The trade tensions between the US and its trading partners have escalated again. Following President Donald Trump's decision to impose import tariffs of 25% on Canada and Mexico, the two countries have vowed to retaliate. In response, Canadian Prime Minister Justin Trudeau has announced the introduction of a 25% tariff on US goods, including beer, wine, food, and appliances. Additionally, Trudeau has encouraged Canadian citizens to support domestic products and reconsider their vacation plans in the US. Mexico's President, Claudia Sheinbaum, has also promised retaliatory tariffs. China, a major target of previous US tariffs, has not announced new tariffs but has vowed to retaliate against Trump's 10% levy on Chinese exports. These responses followed shortly after Trump's order, and it remains uncertain if further negotiations will take place. Experts believe this marks a new phase of the trade war, targeting multiple countries, including allies, as part of US economic and geopolitical policy objectives.
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Canada also announces 25% import tariff from US starting Tuesday (4/2)
Following the recent announcement by the US President, Donald Trump, of new import tariffs, the Canadian government has confirmed its plans to retaliate. Canadian Prime Minister Justin Trudeau has confirmed that a 25% tariff will be imposed on a range of US goods, including beverages and appliances. This development follows a period of strained relations between the two nations, which share the world's longest land border. Trudeau stated that tariffs on $30 billion of US imports will take effect on the same day as Trump's tariffs, with duties on the remaining $125 billion worth of imports coming into effect in 21 days. The decision by Trump to impose tariffs on imports from Canada, Mexico, and China could potentially ignite a trade war that, according to economists, could slow global growth and increase inflation. Trudeau also warned that these tariffs would raise costs for US citizens, affecting items such as food and petrol. The reciprocal measures Canada is considering in response underscore the tense state of the relationship between the two allies.