United States President Donald Trump has officially implemented a new 25% tariff on all steel and aluminum imports. This significant change intensifies fears surrounding a potential global trade war. The latest tariffs follow existing metal duties and might provoke retaliatory actions by other nations.

Market Reactions

Asian steelmaking stocks have largely declined, with the exception of those companies maintaining U.S. operations.

The U.S. dollar has seen a rise in value, while Treasury yields have increased slightly.
Investors are particularly wary of rising volatility if responses from countries like China materialize.

Experts Weigh in on Tariff Implications

Vasu Menon from OCBC, Singapore, stated:

• This maneuver could serve as a negotiation tactic, but if enforced, it would negatively influence U.S. manufacturers dependent on Canadian and Mexican steel.
• Investors should prepare for a period of increased volatility as these trade disputes intensify.

Kyle Rodda from Capital.com, Melbourne, voiced his opinion:

• In the short-term, expect significant inflationary pressures due to rising import costs.
• Long-term views highlight a potential slowdown in economic growth amid ongoing trade tensions.
• The market may face a substantial downturn should China retaliate.

What Investors Should Do Amid High Volatility

Investors must closely observe economic indicators and the performance of relevant sectors while the trade tensions persist.

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