The Dollar Index (DXY), which tracks the US Dollar (USD) against a basket of six major currencies, briefly fell below 106.00 on a volatile Tuesday after US President Donald Trump confirmed that tariffs on Canada, Mexico and China would not be delayed. Markets remained skeptical on Monday whether President Trump would grant an extension just before the deadline. However, it was not a surprise that the US imposed the previously promised tariffs.
Meanwhile, Canada and China have responded to the unilateral U.S. tariffs. Late Monday, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs on U.S. goods. “Canada will begin with 25% tariffs on C$30 billion worth of U.S. imports starting Tuesday,” the statement said, while tariffs on another C$125 billion worth of goods will go into effect in 21 days.
On Tuesday morning, China announced its own levies on U.S. agricultural goods. China’s Commerce Ministry said it would impose additional tariffs of up to 15% on imports of key agricultural products, including chicken, pork, soybeans and beef, from the U.S. The ministry said the tariffs would take effect on March 10.